CalPERS Launches Fund for Retiree Benefits Costs
CalPERS on Monday announced the creation of a new trust fund to which members could contribute funds for future retiree health costs, the Sacramento Business Journal reports.
The California Employers' Retiree Benefit Trust Fund will be available to public employers that contract with CalPERS for employee health benefits. Employers would be able to use investment earnings to fund future retiree health benefits in advance.
Retiree benefits include dental, hearing, vision, life, disability and long-term care. The trust fund begins March 1 (Sacramento Business Journal, 2/26).
New accounting rules require state and local governments to disclose future retiree health care liabilities. Most government entities fund these obligations annually rather than contributing to them in advance.
The Department of Finance in April 2006 authorized CalPERS to spend as much as $2.9 million to consider establishing the fund (California Healthline, 10/19/06).