Assembly Bill 554 becomes effective January 1, 2008, according to a CalPERS press release. Currently, only employers that contract with CalPERS for heath benefits have been eligible to participate in the trust fund.
Public employers can now make regular periodic contributions into the California Employers’ Retiree Benefit Trust Fund to be invested. In the future, participating employers can use investment earnings to pay for retiree health benefits and OPEB obligations.
According to CalPERS, to participate in the California Employers’ Retiree Benefit Trust Fund, employers must:
- certify their agency is eligible under applicable laws and regulations.
- obtain an actuarial valuation prepared in accordance with CalPERS guidelines.
- have the agency’s governing body adopt the CalPERS agreement to prefund OPEB costs.
- submit an original signed agreement, actuarial valuation report, certification that the actuarial valuation satisfies CalPERS requirements, and a summary of actuarial information on a diskette or CD to CalPERS for approval.
The prefunding plan was established by CalPERS to help public employers address issues related to Governmental Accounting Standards Board Statement 45 (GASB 45) which requires public employers to begin reporting future OPEB liabilities in their financial statements (See CalPERS Approves Plan for Pre-funding Health Benefits).
The plan was established afterCalifornia
‘s Legislative Analyst’s Office (LAO) issued a report on
the state’s retiree health care funding crisis, suggesting
pre-funding as an answer (See
CA Accountability Group Suggests
Pre-funding Retiree Health Care
Additional information, application instructions, and all the necessary forms are available on the CalPERS Web site at www.calpers.ca.gov or employers may call the CalPERS Employer Contact Center at 888 CalPERS (or 888-225-7377) for assistance.