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eligible for retirement benefits. On the OPEB side, the County of San Diego last year eligible
for retirement benefits. On the OPEB side, the County of San Diego last year eliminated the
health care benefit for employees who retired after March 2002, affecting 2,600 recent retirees
and all current employees. Over the opposition of public employee unions, voters in the City
of San Diego last November approved a charter provision requiring voter approval for any
change in the city’s pension plan, including any changes in benefits. An effort reportedly is
underway to put a similar measure before voters in Orange County.effort reportedly is
underway to put a similar measure before voters in Orange County.reportedly is underway to
put a similar measure before voters in Orange County.underway to put a similar measure
before voters in Orange County.
for retirement benefits. On the OPEB side, the County of San Diego last year eliminated the
health care benefit for employees who retired after March 2002, affecting 2,600 recent retirees
and all current employees. Over the opposition of public employee unions, voters in the City
of San Diego last November approved a charter provision requiring voter approval for any
change in the city’s pension plan, including any changes in benefits. An effort reportedly is
underway to put a similar measure before voters in Orange County.effort reportedly is
underway to put a similar measure before voters in Orange County.reportedly is underway to
put a similar measure before voters in Orange County.underway to put a similar measure
before voters in Orange County.
Page 2
For their part, public employee and retiree organization representatives view these actions as
unwarranted attacks on well-earned benefits. The unfunded liability “crisis” is a “media
creation,” one labor leader told a Public Retirement Journal workshop in January. Most
systems, he said, should be “fully funded within the next couple of years.”
Two recent developments will have a bearing on the debate and discussion going forward. The
first is the creation by the Governor of the Public Employee Post-Benefits Commission. And the
other is the establishment by CalPERS of a Health Care Pre-Funding Program.
The Governor’s Commission was created to propose ways to address growing pension and
retiree health care obligations of California’s state and local
governments. Specifically, the Commission is tasked to:
• Identify the total unfunded pension and health care liabilities of state and local
government in California;
• Evaluate and compare various approaches to address the unfunded
obligations; and
• Propose a plan to address those obligations by January 1, 2008.
Consisting of nine members from employee unions, investment banks, the academic
community and public agency management, the Commission held its first meeting in March
2007 and legislators, public agency employers and employees alike are closely following its
deliberations.
unwarranted attacks on well-earned benefits. The unfunded liability “crisis” is a “media
creation,” one labor leader told a Public Retirement Journal workshop in January. Most
systems, he said, should be “fully funded within the next couple of years.”
Two recent developments will have a bearing on the debate and discussion going forward. The
first is the creation by the Governor of the Public Employee Post-Benefits Commission. And the
other is the establishment by CalPERS of a Health Care Pre-Funding Program.
The Governor’s Commission was created to propose ways to address growing pension and
retiree health care obligations of California’s state and local
governments. Specifically, the Commission is tasked to:
• Identify the total unfunded pension and health care liabilities of state and local
government in California;
• Evaluate and compare various approaches to address the unfunded
obligations; and
• Propose a plan to address those obligations by January 1, 2008.
Consisting of nine members from employee unions, investment banks, the academic
community and public agency management, the Commission held its first meeting in March
2007 and legislators, public agency employers and employees alike are closely following its
deliberations.
| Pension and Health Care Costs for Public Retirees Crisis or Challenge? City Auditor, City of Long Beach |