LAO Report Offers CalPERS Cost-Cutting Suggestions

The California Public Employees' Retirement System could "do more" to decrease the amount it pays for health insurance for state workers, a new study by the Legislative Analyst's Office concludes, the Sacramento Bee reports. The report, which examined the growth of CalPERS' health costs in recent years as well as steps that trustees of other pension funds have taken to slow premium increases, suggested two possible ways to decrease the projected $1.7 billion that CalPERS will spend on health insurance next year. One recommendation would be for CalPERS to offer "a range of HMO packages" with varying prices and benefits, which would allow all workers "affordable coverage" while permitting some employees to pay more for extensive coverage. The other suggestion would be to ask legislators to change the amount state workers contribute toward monthly premiums. California's share of premiums for state workers and their dependents is greater than that of most other states, the Bee reports (Rapaport, Sacramento Bee, 11/7). The report is available online.