San Diego Focuses on Endangered Retiree Health Care

September 2, 2005 ( - After a meeting during which hundreds of current and retired county employees protested the possible loss of benefits, the San Diego county pension board agreed to pay another year of medical benefits for more than 11,000 retirees.

The North County Times reports that the board has been providing health care benefits to retirees for 33 years in spite of the fact that medical coverage has never been a guaranteed “vested” benefit. The San Diego County Employees Retirement Association board doesn’t know how it will continue to fund medical benefits for retirees without eating into the pension fund’s guaranteed benefits to county workers.

So far, the board has paid for the health benefits by using the interest the pension fund earns in excess of its 8.25% target each year, the Times reports. Continuing to use the so called “excess” returns eats into the profits used to balance out deficits, when the fund doesn’t earn the 8.25%, and could create shortfalls for the county’s $6.3 billion pension fund.

Brian White, the pension association’s executive director, said of the fund’s health care costs: “A few years ago, they were $9 million to $12 million. A year ago, they were close to $30 million, and two years from now, they’re going to be $60 million,” the North County Times reports.

The health care funding issue will ultimately have to be settled by the Board of Supervisors because, by law, only county supervisors can determine benefits or extend benefits for their employees. County supervisor Dianne Jacob, also a member of the pension board, said that the pension board could manage the funding issue, though, by providing tiered benefits that would take from some and give to others. But another board member said it is not the board’s job to determine who to provide benefits for or not.

The board voted to continue studying the issue and hold public meetings in 60 to 90 days to discuss ways to fix the problem.