[quote=SK in CV] . . . If you remember a few years ago when the auto industry was in massive trouble. The promised retirement benefits cost them more than they could afford. But it wasn’t monthly pensions. It was health care. More than once over the last 30 years, they had pension trusts that were actually over-funded, and they made deals with the unions to take that money back. Then the cost of health care spiraled up and out of control, and they were no longer over-funded. . .[/quote]

Overall good and informative post, SK. Since retiree healthcare was provided older “Tier 1” retirees but never contracted with the unions, the way SDCERA solved the escalating costs of retiree healthcare was to charge the retirees 100% of their (group rate) premium. Tier I retirees plus the formerly Tier II (now added into Tier I) *newer* (pre March 2002) retirees are paid an allowance of $200 – $300 mo to offset monthly premiums (only if they subscribe to a plan) but the monthly premiums are nearly twice that and far beyond. Those retiring after 3/8/02 under an *enhanced* (Tier A) plan do not get the healthcare allowances. The entire monthly premium is/will be subtracted from their pensions.

The 06/07 Grand Jury Investigative Report on SDCERA stated that, at that time, only about 2/3 of (non-Medicare) retirees availed themselves of the County’s plans. This is understandable given the current competitive and choice-laden individual market out there (available to those without pre-existing conditions).

edit: The monthly healthcare allowance paid to SDCERA Tier I retirees (a finite amt of employees who have already left svc) is a fixed sum between $200 and $300 mo based upon years of service. As health plan rates continue to rise, this sum will continue to be fixed.

I note that nearly 100% of the older original “Tier 1” retirees are now eligible for Medicare or dead.