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Tuesday, November 16, 2010

Regents Session on Retiree Health, Nov. 17

The Regents will take up retiree health on Wednesday, Nov. 17, in a session beginning 10:15 AM. You can find the background materials at http://www.universityofcalifornia.edu/regents/regmeet/nov10/f4.pdf

The chart above, which does not appear very clearly as reproduced in this blog, is on page 5. It shows the retiree health program's unfunded liability. In fact, the program is not prefunded so virtually all funding is pay-as-you-go. But the background report treats it in the same way that the pension plan is treated. The chart shows the unfunded liability - with no change in the participant contribution policy - rising from around $15 billion now to around $29 billion in 2020. Of course, much depends on the assumed trend in the cost of providing health care. And there will be a change in policy.

Any increase in participant contributions decreases the unfunded liability. President Yudof will present a plan to increase such contributions as part of the more general report on retiree pension+health funding. See prior posts on that plan. It appears that, as in the case of the pension, decisions are not going to be made until the December meeting.

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