Sonoma County Approves Plan To Reduce Retiree Health Benefits
On Tuesday, the Sonoma County Board of Supervisors unanimously approved a proposal to scale back retirees' health benefits in an effort to reduce a liability for future retiree health care costs, the Santa Rose Press Democrat reports (Rose, Santa Rosa Press Democrat, 2/6).
New guidelines from the Governmental Accounting Standards Board require public agencies, including counties and states, to disclose the future cost of retiree health care benefits. Sonoma County faces a liability of $398 million in retiree health care costs over the next 30 years.
To meet the liability, the county would have to set aside $37 million annually over the next three decades, almost twice as much as it has been saving. The county currently pays 85% of employee and early retiree health plans and 85% of Medicare supplemental plans.
County administrators propose paying a set dollar amount per retiree, regardless of the number of dependents. The proposal would affect about 2,400 retirees who were managers or supervisors or were represented by unions when they worked for the county (Rose, Santa Rosa Press Democrat, 2/5).
Details of how much retirees would contribute will be negotiated with unions as contracts come up for renewal, beginning in June (Santa Rosa Press Democrat, 2/6).
The county also proposes to stop funding benefits for future workers and establish a deferred compensation program, such as a health retirement account, funded with pre-tax dollars.
Under the proposal, county supervisors would be allowed to grant cost of living increases on retiree health care programs to account for rising health care costs. The plan depends on available funding (Santa Rosa Press Democrat, 2/5).