California Controller John Chiang Monday released an actuarial report saying the state faces a $59.9 billion bill to pay for health care and dental benefits for state retirees over the next 30 years.
Chiang said it’s time for the state to take steps toward pre-funding non-pension other post-employment benefits, or OPEBs.
“It is critical that we begin making down payments on this tab and adopt strategies to reduce health care costs,” he said. “Because this bill is not immediately due, California has the time and the opportunity to reduce the impact on future generations by putting additional dollars into the annual payments so that we can invest those funds, grow that money and tackle our obligation in a responsible manner.”
Chiang said the unfunded obligation as of June 30, 2010, grew by $8.1 billion compared to one year earlier.
Less than half of the increase was simply due to another year of costs, payments and interest, according to the controller, who said the bulk of the increase was due to a change in the California Public Employees’ Retirement System’s pension-benefit assumptions based on its latest 10-year study.
That study found employees are retiring earlier, retirees are living longer, and actual premiums increased more than previously projected by the actuary.
The report can be found at: