Gov. Renews Plans To Reform CalPERS, Cut Retiree Health Benefits

Gov. Arnold Schwarzenegger (R) is revisiting an earlier proposal to reduce retiree health benefits and lower other pension obligations for newly hired state employees, the Sacramento Bee reports.

Under Schwarzenegger's plan, newly hired workers would receive the same pensions that were in place in 1999.

The governor says CalPERS and the California State Teachers' Retirement System currently face tens of billions of dollars in unfunded pension obligations. He said his proposal would reduce state spending by $90 billion over the next 30 years.

The Service Employees International Union and other labor groups say they are willing to consider cost-savings ideas through contract negotiations but not through legislation.

However, administration officials say they believe lawmakers ultimately will agree to reduce the pension obligations because of the state's current budget strain (Kasler, Sacramento Bee, 8/17).

Public Agencies Provide Varying Levels of Retiree Health Coverage

Meanwhile, California's local public agencies are extending different levels of health coverage to their retirees, the Visalia Times-Delta reports.

Some public agencies cover the entire cost of health care benefits for retired employees, while others pay a portion of their former employees' health premiums. Still other agencies require former workers to cover all of their health premium costs.