San Diego City Retiree Health Benefit Compromise
Tuesday, April 21, 2009
SAN DIEGO San Diego mayor Jerry Sanders says the labor agreements being hammered out with city employee unions will do more than help plug this year’s budget gap, they will save the city millions of dollars in pension and health benefits in the future. KPBS reporter Alison St John has more.
The city’s labor unions have balked at asking existing employees to contribute more to their retiree health plans. Those benefits are a $1.2 billion liability for the city. But unions have agreed to freeze the benefits for two years.
Sanders says, since retiree health costs have been rising about 10 percent a year, the freeze will actually save the city millions of dollars.
"Retiree health care savings is probably one of the more significant pieces of this," the mayor says. "Just by freezing the benefits at the current level of $740 a month, that reduction to the unfunded liability, if played out over a long period of time, would be about $350 million."
The unions have agreed to study different kinds of retiree health plans over the next two years, with a view to possible changes to those benefits for existing employees in 2010.
New employees hired since 2005 are not been eligible for guaranteed retiree health care coverage.
The city council is expected to vote on the labor agreements on Tuesday in closed session.
Alison St John, KPBS News