San Francisco Seeks To Rein In Health Care Liability for Retirees
A San Francisco supervisor plans to introduce a charter amendment next week that would overhaul retiree health care benefits for city workers in an effort to reduce an unfunded liability for health care costs, the San Francisco Chronicle reports (Buchanan, San Francisco Chronicle, 12/7).
In 2000, San Francisco spent $17 million on health care for retirees, compared to $115 million this year. Over the next 30 years, the city faces an estimated $4 billion liability for covering health care benefits for current and future retirees, according to the city controller's office (Sabatini, San Francisco Examiner, 12/7).
Supervisor Sean Elsbernd said that in 30 years San Francisco "will not be able to deliver basic services and there will be massive layoffs" because of retiree health care costs. He added, "The city as an employer will not be able to sustain itself."
Elsbernd's plan would extend from five years to 20 years the waiting period for a new worker to become eligible for full retiree health benefits. Under his plan:
- Employees who had worked 10 years would have half of the cost of their benefits covered, while employees with 15 years tenure would get 75%;
- The eligibility age for retiree benefits would be extended from 50 to 55; and
- Workers must fully retire -- not move to a new job or career outside of city government -- within 120 days of leaving their jobs with San Francisco to qualify for the benefits.
New workers would have to pay into a new trust fund to help cover the costs. The trust fund also would receive money from the city's reserve fund (San Francisco Chronicle, 12/7).
Elsbernd seeks to win voter approval of the measure on the June ballot. If the plan does not receive the necessary votes from supervisors to qualify for the ballot, Elsbernd said he would seek to qualify it through a voter petition (San Francisco Examiner, 12/7).
Mayor Gavin Newsom (D) said he supports the plan
Tim Paulson, executive director of the San Francisco Labor Council, criticized the notion of seeking a ballot initiative without support from labor unions, calling such a move "premature and irresponsible."
Supervisor Gerardo Sandoval plans to offer a competing proposal intended as a compromise between the Elsbernd amendment and organized labor. Sandoval said his plan would address retiree health care costs and increase pensions (San Francisco Chronicle, 12/7).