San Diego County Approves Retiree Health Care Cuts
San Diego County supervisors and the county retirement board on Tuesday reached an agreement over reducing retiree health benefits and eliminating the county's pension deficit, the San Diego Union-Tribune reports.
The settlement includes a plan by county supervisors to eliminate health care benefits for 3,000 former employees who retired after 2002. The plan, however, will give those retirees an extra monthly check of up to $400 to offset the loss.
If the retirement board did not agree with the proposal, supervisors had threatened to end county contributions to all retiree health benefits.
Supervisors as part of the new agreement will continue funding benefits for 7,000 retirees who left prior to 2002.
New federal accounting rules set to take effect next year will require the county to disclose all future liabilities for retiree health costs, thus creating a $670 million long-term debt.
Supervisors said the benefit cuts for recent retirees will reduce the long-term debt by $400 million.
The county also faces a $1.2 billion pension deficit. The retirement board as part of the agreement will use investment earnings to reduce the deficit.
Officials estimate that the deficit could be eliminated by 2013 under the new agreement (Gustafson, San Diego Union-Tribune, 6/20).