Public Employee Benefits Commission Issues Final Report
A bipartisan Public Employee Post-Employment Benefits Commission has issued an eight-point plan designed to address the unfunded pension and retiree health care liabilities for California state and local governments.
Among its unanimous recommendations, the Commission strongly urged that health care benefits be prefunded in the same way that pension benefits are currently prefunded. It also emphasized the fact that pensions and health care benefits are critical to attract and retain qualified individuals to government service.
"The pension and health care components of compensation are critical to both active and retired public employees," said Commission Chair Gerald L. Parsky. "The best way to ensure that government promises are kept is to provide prefunding for these benefits. It is equally important that this funding be made in a fiscally sound and prudent manner that will not negatively impact other government services."
The Commission's plan includes recommendations in eight areas:
- Identify and prefund financial obligations;
- Limit contribution volatility and use smoothing methods judiciously;
- Increase transparency and accountability;
- Improve plan design and communication with employees;
- Provide independent analysis;
- Strengthen governance;
- Coordinate with Medicare; and
- Advocate Federal tax law changes.
Appointed in February 2007 by the governor and legislative leaders, the commission included members from labor, business, academia and the public sector with widely different backgrounds and philosophies.
The fact that these members reached a unanimous consensus on the recommendations was, in the words of commission member Ron Cottingham, president of the Peace Officers Research Association, "truly remarkable."
More information on the recommendations is available on the Commission's Web site. Also, here's a news release on the report from the Californians for Health Care and Retirement Security Coalition.