O.C. reduces its projected retiree healthcare deficit
Concessions on retiree medical coverage approved in recent months by labor groups representing Orange County employees have cut an estimated $800 million from a projected $1.4-billion deficit in future retiree healthcare costs.
County public finance manager Thomas Beckett told supervisors Tuesday that further savings could come pending negotiations with the Assn. of Orange County Deputy Sheriffs, the only labor group that has yet to strike a deal.
Rising medical costs and longer life spans created the huge gap over the next 30 years, and workers agreed to reduced medical coverage in retirement in exchange for pay raises now as a way to close the gap.
“We’ve dealt with it,” Supervisor John Moorlach said. “We still have an unfunded liability, but we’re working” to reduce it further.
Under the restructured plan, the biggest savings will come from splitting active and retired employees into separate insurance risk pools.
The move will reduce the county’s cost to cover current workers but will require retirees to pay higher premiums.
The compromise angered current retirees on fixed incomes, who fear they may not be able to afford the insurance.
