The burgeoning cost of OPEB, Other Post Employment Benefits, and an unexpected prior year obligation were major items of discussion during the special meeting of the San Benito County Board of Supervisors on Tuesday.
The benefit consists of lifetime health insurance coverage for county public employee retirees.
Trust fund obligations are based on several demographic and employment factors, while the county fund is currently funded at less than 30 percent. To be fully funded, plans of this type normally need between 70 percent and 80 percent of the accrued actuarial obligations.
In addition to the scheduled annual payment of $3.3 million, the program was hit with a previously un-captured one-time obligation of $1.1 million, which comes at a time when the board is having difficulty with the budget.
The board had directed staff to work on the entire OPEB issue, which has become a major expense item, and supervisors plan to review the recommendations within the next few months.
In the interim, the board directed staff to spread the added obligation payment out over several years or to look for one-time funding if it should become available.
Underfunded OPEB obligations have become a major issue throughout the state as the cost of healthcare continues to outpace the increases in the economy. Statewide and local unfunded OPEB liabilities are estimated to range between $300 billion and $1 trillion.
