Government Code Section 7507 (b)(2) requires that the Board when considering changes in retirement benefits or other postemployment benefits, shall secure the services of an actuary to provide a statement of the actuarial impact upon future annual costs, including normal cost and any additional accrued liability, before authorizing changes in public retirement plan benefits or other postemployment benefits.
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On July 26, 2011, Tentative Agreements with BCTC and SMCCE will be presented to the Board of Supervisors. One of the terms includes changing retiree health benefits for new hires. For employees hired on or after August 7, 2011, who retire concurrently with separation from County service, for every 8 hours of unused sick leave, the County will pay $400 toward the premium for one month of the retiree health plan, or a combination of a contribution to a retiree health savings account and a lesser monthly benefit that is actuarially equivalent. Additional sick leave hours are credited based on years of service at retirement.
Based on a review by Milliman Inc., the actuarial impact of this benefit change is noted in the table below.
Y1 Savings
$2,000
Y5 Cumulative Savings
$10,000
Y10 Cumulative Savings
$23,000
Pursuant to Government Code §7507(c), the actuarial certification of the cost savings to implement the retiree health benefit changes is being presented for your acceptance at least two weeks prior to implementation of the changes.
Accepting this report contributes to Shared Vision 2025 of a Prosperous Community by helping to meet current budget challenges.
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