San Diego Studies Shift to Defined-Contribution for Retiree Health Care
At a hearing Tuesday, the San Diego City Council will discuss a proposal to rework the retiree health care benefits system for city workers, moving to a defined-contribution system that could leave retired workers to shoulder more of their own health care costs, Voice of San Diego reports.
Currently, the city uses a defined-benefit system that provides up to $8,880 toward each retiree's health care costs.Â The contribution can increase by as much as 10% annually to help address rising health care costs.
Mayor Jerry Sanders (R) proposed moving to the defined-contribution system to help the city address its projected $1.2 billion unfunded liability for retiree health care costs.Â The change would not apply to all current city workers (Gupta, Voice of San Diego, 4/12).
The proposal comes as contract negotiations between the mayor and the five unions that represent county workers have deadlocked (Gustafson, San Diego Union-Tribune, 4/12).
Unions have not rejected the proposal entirely, but labor leaders said they have not had sufficient time to evaluate the plan and weigh its implications for their members (Voice of San Diego, 4/12).
San Diego also is seeking furloughs and other concessions from city workers right now to help address a $60 million budget deficit in fiscal year 2009-2010 (San Diego Union-Tribune, 4/12).
According to Voice of San Diego, it is unclear whether the city council can adopt the changes, and voting to adopt the proposal likely would spark a lawsuit.Union officials say the city charter requires changes to employee health benefits to go before workers for a vote (Voice of San Diego, 4/12). 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.