Editorial Criticizes Commission To Examine Retiree Health, Pension Benefits

The creation of the Public Employee Post-Employment Benefits Commission by Gov. Arnold Schwarzenegger (R) last week "will do nothing more than delay by a year any real-world solution to" unfunded liabilities for health benefits and pensions for retired public employees, an Orange County Register editorial states (Orange County Register, 1/3).

A February 2006 report by the Legislative Analyst Office estimates the cost of future health care benefits for retired state and University of California employees at $40 billion to $70 billion. Such costs would be spread over 30 years.

The commission is directed to report its recommendations the Legislature by Jan. 1, 2008 (California Healthline, 1/2).

According to the editorial, "the governor wants to spend a year gabbing about the problem in a commission that will be dominated by union members and Democrats who will resist any serious reform."

To address the cost of retiree health care benefits and pensions, the editorial states that health benefits "need to be trimmed back to real-world levels" and move from a "defined-benefit plan with guaranteed benefits to a defined-contribution plan similar to those in the private sector" (Orange County Register, 1/3).