Legacy costs is a term formed by analogy with the computer industry's legacy systems. Legacy costs are those incurred by an organization (whether corporation or city) in prior years under different leadership or when the entity's priorities and resources were different. While it can refer to other commitments (particularly existing infrastructure) as well, it primarily refers to obligations to pay health care costs and pensions under defined-benefit plans for current employees and retirees, usually incurred during the labor peace era after World War II.
Legacy costs is a term derived from computer industry's legacy systems. Legacy costs are expenses an organization (corporation or city) incurs in previous years under different management or when the entity’s priorities and resources were distinct. While it can encompass other commitments, such as existing infrastructure, it mainly pertains to obligations for healthcare and pension payments under defined-benefit plans for current employees and retirees, typically incurred during the labor peace era following World War II.