San Francisco Faces $4.9B in Retiree Health Care Costs
San Francisco officials are working to reduce the city's $4.9 billion liability for funding retiree health care benefits over the next 30 years, the San Francisco Chronicle reports.
New federal accounting rules require public agencies to disclose the future costs of retiree health care benefits. San Francisco currently pays for such benefits on an annual basis.
Supervisor Sean Elsbernd and Mayor Gavin Newsom (D) have created a Retiree Health Benefits Fund for the city to set aside money to fund future benefits.
In his budget proposal for fiscal year 2007-2008, Newsom has included $500,000 for the fund. If the city can make regular contributions to the fund, the $4.9 billion liability drops to $3 billion, according to a 2006 study.
Officials also are proposing to adopt tougher eligibility rules for retiree health benefits and require new employees and the city to make contributions to the new fund. The fate of the proposals could be decided on the city ballot next year.
The proposed mandatory contributions are modeled after San Francisco's pension plan, which uses combined city and worker contributions to fund the system for current and future benefits (Wildermuth/Selna, San Francisco Chronicle, 7/5).