San Diego Looking Into Plan To Reduce Retiree Health Care Obligations
San Diego officials are weighing the possibility of reducing retiree health care benefits after a federal court ruled that the city's retiree health care obligation is not a "vested right" like public worker pensions, Capitol Weekly reports.
Jan Goldsmith, San Diego city attorney, said the ruling has prompted the city to enter into negotiations with several labor unions about possible cuts to its retiree health benefits.
If the labor unions do not agree to the benefit reductions, officials plan to present the issue to the city council.
Jay Gladstone, city chief operating officer, said San Diego is spending about $58 million this year to fund current expenses and future obligations for retiree health care. He added that the city would need to pay an additional $60 million to properly fund its future retiree health obligations.
Implications for California
Last year, a governor's commission estimated that California's state and local governments have at least $118 billion in unfunded liabilities for retiree health care over the next 30 years.
The commission recommended that agencies begin setting aside money in order to "prefund" their retiree health care obligations.Although experts say it is unclear whether the San Diego ruling could apply to other jurisdictions, the decision could spur other agencies to consider the option of negotiating retiree health care cuts (Mendel, Capitol Weekly, 12/17). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.