EMPLOYMENT LAW: Budget for Retiree Health Benefits in California Rises

March 14, 2011

Sacramento – The projected cost of health benefits for retired state employees has risen to nearly $60 billion as state lawmakers discuss the expenditure for pensions and benefits, reports say.

According to reports released Monday, half of the $8.1 billion increase is due to the California Public Employees' Retirement System’ assumption adjustments as the previously projected premiums are higher and that more state employees are retiring early and live longer.

The state currently provides only a third of what it owes the system, about $4.2 billion this year.

According to state controller John Chiang, the remaining two thirds, $2.8 billion, will be added to the state liability.