A Superior Court decision Thursday bolstered the city of San Diego’s argument that it has no obligation to provide health care benefits to current workers when they retire, the Union-Tribune is reporting this morning.
The court ruling comes at a key time. The city and its labor unions are nearing the end of two years of talks to trim retiree health care costs. Currently, the city’s unfunded health care liability is $1.1 billion. The decision adds to the city’s leverage to reduce that debt with more ease than its employee pension debt.
“This decision brings an opportunity and a choice,” City Attorney Jan Goldsmith said in a statement. “We can either continue litigating this issue for years through the appellate courts or we can resolve retiree health by coming together on a reasonable plan that will save taxpayers hundreds of millions of dollars. This court ruling offers an opportunity to get results.”
Retiree health care promises to current workers made up 55 percent of the city’s liability as of last year. Health care for already retired workers is considered untouchable.
We’ve reported on the complexities of reducing health care costs, and last week wrote about city employees who might not be eligible for Medicare and face the risk of no health coverage if the city benefit is eliminated.
You can read a copy of the ruling.
Here’s one other point for our stories on retiree health care. In our piece last week, we said the city’s health care unfunded liability was $1.4 billion, relying on a September report that’s the foundation for health care negotiations. Since September, the city has received an updated study from its actuary that pegs the unfunded liability at $1.1 billion. We’ll be using $1.1 billion in our stories going forward.