COUNTIES' RETIREE HEALTH COSTS TRIPLE BONDS ONE OPTION BEING CONSIDERED.Byline: Troy Anderson Anderson, river, Canada Anderson, river, c.465 mi (750 km) long, rising in several lakes in N central Northwest Territories, Canada. It meanders north and west before receiving the Carnwath River and flowing north to Liverpool Bay, an arm of the Arctic Staff Writer Just 4 percent of California's counties have fully funded their retirees' health benefit costs, a California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). State Association of Counties survey has found. The survey of 48 of the state's 58 counties also found that the number of retirees statewide has grown by 12 percent in the last five years, while the amount counties are spending annually on their health care has tripled from $169 million to $567 million. ``What's been really dramatic is the substantial increase in costs due to the increased number of retirees as a result of the baby boom phenomena and medication inflation,'' CSAC CSAC California State Association of Counties CSAC California Student Aid Commission CSAC Computer Science Accreditation Commission (ACM) CSAC Cyberspace Snow and Avalanche Center CSAC Citizens Stamp Advisory Committee Legislative Coordinator Steve Keil said Thursday. The findings come as counties begin calculating the total unfunded liabilities of providing health care to retirees under a Government Accounting Standards Board The role of the Accounting Standards Board (ASB) is to issue accounting standards in the United Kingdom. It is recognised for that purpose under the Companies Act 1985. It took over the task of setting accounting standards from the Accounting Standards Committee (ASC) in 1990. rule going into effect next year. Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. County Chief Administrative Officer A chief administrative officer (CAO) is responsible for administrative management of private, public or governmental corporations. The CAO is one of the highest ranking members of an organization, managing daily operations and usually reporting directly to the chief executive David Janssen said the county has a ``pay-as-you-go'' system and plans to hire an actuary actuary One who calculates insurance risks and premiums. Actuaries compute the probability of the occurrence of such events as birth, marriage, illness, accidents, and death. this spring to calculate its unfunded liability for retiree health benefits. The county grand jury recently estimated the unfunded liability at $9 billion. Janssen said the CSAC survey is designed to help counties explore how to either reduce or pay the future costs. One option being considered is is issuing bonds, similar to the $2 billion pension bond the county issued in the early 1990s. While other counties have the option of negotiating with employee unions to limit or eliminate retiree health benefits, Janssen said a 1982 state law requires Los Angeles County to provide retiree health benefits. ``We'd have to change the law first,'' Janssen said. ``We obviously want to take a look at attempting to minimize the cost in the out-years in discussions with the unions.'' Keil said he expects many counties to explore bond issues and reducing health benefits provided to retirees. ``There will be no easy fixes,'' Keil said. ``There will be significant new costs if they want to prefund the liabilities and amortize amortize To write off gradually and systematically a given amount of money within a specific number of time periods. For example, an accountant amortizes the cost of a long-term asset by deducting a portion of that cost against income in each period. over 20 years. It could increase by 300 to 400 percent the cash flow costs as they pay down the unfunded liabilities.'' Although the survey did not estimate the total unfunded liabilities for retiree health care, Keil noted that Los Angeles County has about 140,000 active and retired employees while the state has 1.5 million city, county, state and special district active and retired employees. The survey also found that 98 percent of retirees are eligible for health benefits and about nine out of 10 plans provide benefits past age 65 to dependents and survivors. In Ventura County, Chief Deputy Executive Officer Paul Derse said the county's unfunded liability for retiree health care costs is about $40 million. But he said the county has already eliminated retiree health benefits for new managers and is considering eliminating a subsidized sub·si·dize tr.v. sub·si·dized, sub·si·diz·ing, sub·si·diz·es 1. To assist or support with a subsidy. 2. To secure the assistance of by granting a subsidy. retiree health benefit program. ``We don't expect this to have a significant impact on our budget,'' Derse said. ``We knew they were out there, have started to have a little more serious discussion on the issue and have already eliminated one program.'' Troy Anderson, (213) 974-8985 troy.anderson(at)dailynews.com |
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