Thursday, March 1, 2007

CalPERS debuts prefund program for retiree benefits

This story from the Sacramento Business Journal highlights steps taken by the California Public Employees’ Retirement System (CalPERS) to address the future costs of post-employment benefits.

The California Public Employees' Retirement System on Monday announced the creation of a new trust fund for public employers that contract with CalPERS for employee health benefits to prefund the future cost of post-employment benefits, including health insurance.

The California Employers' Retiree Benefit Trust Fund allows employers to make regular contributions to the trust fund. Employers would be able to use investment earnings to pay for retiree health benefits, much like the CalPERS retirement fund, where three of every four dollars for retirement benefits come from investment returns.

The trust fund starts March 1.

CalPERS is the nation's largest public pension fund, with $230 billion in assets. It administers health and retirement benefits for 1.5 million active and retired state and local government employees and their families.