San Jose Weighs Options for Paying Retiree Health Costs
The San Jose City Council on Tuesday will begin considering options for funding $1.14 billion in health benefits for retired city employees, the San Jose Mercury News reports.
New federal accounting rules require the city and other public agencies to disclose unfunded health care liabilities for current and future retirees.
Alex Gurza, employee relations director, told the council, "The current benefits provided to city of San Jose retirees are among the richest provided relative to comparable agencies."
San Jose currently is paying enough in future retiree health costs to cover the next 10 to 15 years. However, the city would have to pay an additional $60 million annually to fully fund its obligation after that period.
City officials may consider reducing the amount the city pays for coverage or extending the years of employment needed to qualify for benefits.
The city also might determine the legality of reducing benefits for the 4,100 current retirees and current workers.
The local chapter of the American Federation of State, County and Municipal Employees over the past week agreed to partner with a union representing city engineers and architects to negotiate jointly with the city on retiree health care benefits (Woolfolk, San Jose Mercury News, 8/6).