Enrollment Under Way in CalPERS Fund for Retiree Health Care
CalPERS on Monday announced that Thousand Oaks in Ventura County became the first government agency to enroll in a new trust fund to which CalPERS members could contribute funds for future retiree health costs, the San Francisco Chronicle reports (Colliver, San Francisco Chronicle, 5/9).
The California Employers' Retiree Benefit Trust Fund became available March 1 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. Such benefits include dental, hearing, vision, life, disability and long-term care.
In addition, CalPERS is sponsoring legislation that would expand eligibility for the program to allow all public agencies to invest in the new fund (California Healthline, 2/27).
New federal accounting rules require public agencies to disclose unfunded health care and pension liabilities for current and future retirees. California, like most public agencies, funds retiree costs on a pay-as-you-go basis and does not consider future liabilities (California Healthline, 5/8).
Two newspapers on Wednesday published editorials addressing the release of a report estimating the state's unfunded liability for retiree health care benefits. Summaries appear below.
- Sacramento Bee: California should "set aside major dollars and earn investments returns on them" to help fund future retiree health care benefits, a Bee editorial states. However, state leaders also need to evaluate whether it is feasible to continue offering the same retirement benefits to future workers and evaluate how these benefits can be funded, according to the editorial (Sacramento Bee, 5/9).
- San Francisco Chronicle: California lawmakers are "struggling with the concept" of funding retiree health care benefits in advance, despite a report showing that prefunding could reduce the state's obligations over 30 years by more than $15 billion, a Chronicle editorial states. The state will not need to scale back benefits "if it can summon the nerve to write budgets that include long-term costs and set aside the money to pay such bills," the editorial concludes (San Francisco Chronicle, 5/9).
KQED's "The California Report" on Tuesday reported on California's liability for retiree health care costs. The segment includes comments from Controller John Chiang (D) (Myers, "The California Report," KQED, 5/8).
Audio of the segment is available online.