Retiree Health Care Costs Driving Fare, Parking Fee Increases in BART
The cost of health care benefits for Bay Area Rapid Transit District retirees and their dependents is expected to be at least $33.6 million annually "for years to come," the San Francisco Chronicle reports. Under a labor agreement, BART retirees and their families receive lifetime health care benefits for $25 per month.
To fund its future obligation for retiree health benefits, BART must establish a reserve fund and pay into it about $24.6 million annually. BART officials intend to fund the cost with increased fares and parking fees and about $9 million annually in employee premiums. Currently, 3,196 employees and their families -- and 1,000 retirees and their families -- receive health care benefits through BART.
BART Board of Directors President Joel Keller said that retiree benefit costs were the "biggest factor" in the organization's projected $51 million budget deficit for the next fiscal year. Keller supports the system's benefit plan, but he added that retiree health care costs have presented a challenge to public agencies throughout Northern California. He said, "The worry is that as the number of people using the benefit grows, there won't be enough money. So now we're being required to put it in reserves.''
BART directors estimated that eliminating 115 positions and freezing employee wages could reduce the budget deficit to about $30 million -- "roughly the cost of providing for the retirees," the Chronicle reports.
BART General Manager Tom Margro said that the cost of providing health care coverage for retirees could decrease if the retirement fund "starts making money off of its investments" (Matier/Ross, San Francisco Chronicle, 5/4).