CalPERS Board to Reconsider Policies Impacting Employer Rates
The September CalPERS Board Meetings feature two issues of important significance to counties contracting with CalPERS for either health or retirement benefits. The Board is rethinking two policies that affect employer rates: 1) the “Financial Necessity” exemption in the Amortization Policy that gives employers more time to pay down their unfunded accrued liability (UAL) and 2) the regional map for healthcare pricing.
“Financial Necessity” Exemption in the Amortization Policy
The Actuarial Office drafted a new section in the Amortization Policy, titled “Request to Extend Amortization due to Financial Necessity” (see page 4). The section, along with supporting guidelines, are intended to relieve employer agencies who cannot afford to make payments under the new 20-year amortization schedule. As opposed to the old policy that frustrated employer agencies with its rigid qualification criteria, the new Financial Necessity Policy allows for more dialogue and discussion where the Chief Actuary will help walk the employer through the best course of action.
The draft policy is on the CalPERS Finance & Administration Committee Agenda as an informational item on the morning of Tuesday, September 25 with final action slated to take place in November.
Regional Map for Healthcare Pricing
CalPERS is currently in the process of evaluating the regional boundaries for public agencies and schools enrolled in CalPERS health benefits. This is important because of its direct impact on premium rates paid by public agency employers and employees. Changes under consideration include noncontiguous regions, different boundary lines, and a new naming convention, among others.
The CalPERS health team has been collecting data and analytics as well as stakeholder feedback over the summer and plans to present their findings to the Pension and Health Benefits Committee on Tuesday, September 25 (in the afternoon). The memo is located under informational items on the CalPERS Pension and Health Benefits Committee Agenda. CalPERS staff plans to bring a final recommendation to the Board to take action on in December.
The meetings are webcast online for those who wish to watch remotely. Counties are also welcome to provide public comment at these meetings, located at the CalPERS headquarters (400 Q Street, Sacramento). Feel free to contact CSAC legislative staff Dorothy Johnson or Tracy Sullivan with any