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Friday, September 02, 2005 | County pension officials postponed any potential change to their policy for funding retiree health benefits Thursday after a proposal drew hundreds of anxious seniors to a meeting in Mission Valley.

In the end, county officials decided to refill a reserve for cost-of-living increases for its oldest pensioners and maintain the policy it currently has that sends so-called “excess earnings” to a savings account that pays for retiree medical bills. The board of retirement of the San Diego County Employees Retirement Association also decided to give “interested groups” 60 days to come up with alternative ways the board could provide health benefits in a more efficient way.

“The board instructed us to contact the various interested parties comprised of the labor organizations, county retiree organizations and others and solicit from them ideas as to what can be done to ensure the viability of these ancillary benefits,” said Brian White, the chief executive officer of the county retirement system.

Both the STAR COLA reserve – which helps the very old retirees maintain the spending power they had when they retired – and the health care reserve for retirees are now funded for 5 years.

The county maintains that it does not legally have to pay the medical bills of its retirees.

Retirees were worried that Thursday would mark the beginning of the end of their medical benefits. They were happy with the board’s decision.

“We thought the boom was going to fall down on us and that the board would decide to use our health care money to pay down the unfunded liability in the pension system,” said Dorothy Sloter, a representative of the Retired Employees of San Diego County, Inc.

The county’s pension administrators had floated a proposal that would have cut off funding to retiree health care until the pension system recovered significantly from its $1.2 billion deficit.

The county has paid its retiree health care bills in the same way the city of San Diego did for many years – by taking “excess” earnings off the top of the investment earnings the county expects its pension fund to make each year.

The system ensures then that good years in the investment market are not always as good for the fund as bad years are bad. County officials have been pushing to change that and send most, if not all, of the investment earnings directly into the pension fund. But retirees have had at least part of their medical bills paid since 1974.

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