The Supreme Court said Thursday it would consider whether public employees can be required to pay union dues, revisiting an issue that deadlocked the court after Justice Antonin Scalia’s death last year.
Under a 1977 Supreme Court precedent, states may authorize contracts between public agencies and their employee unions that require represented workers to pay dues, or an equivalent fee, for collective bargaining costs.
California schools are on the hook for $24 billion in future health care costs for their retirees, a mountain of debt that's forcing some districts to curb benefits or spend less on teacher salaries and classroom equipment, according to a new state report. Los Angeles Unified School District boasts a whopping 56 percent share — or $13.5 billion — of the unfunded liability, although it educates nine percent of California's public school population. It's historically provided some of the most generous retiree health benefits, including lifetime coverage for retirees and their spouses. Teachers' union representatives argued good health care is an essential tool for recruiting and retaining teachers. But the looming debt means newer teachers are offered skimpier benefits and less money is available to spend in classrooms.
The City Employees’ Retirement System board, which oversees pension benefits for thousands of city workers, voted unanimously to cut its assumed rate of return — the yearly earnings expected from the agency’s investment portfolio — to 7.25%, down from 7.5%.
The decision is expected to shift $38 million in retirement costs onto the general fund budget, consuming funds that would otherwise pay for basic services. And it comes at a time of increased concern over the city’s growing pension burden.
Another pension agency, which oversees benefits for thousands of retired firefighters and police officers, recently reduced its own rate of return and recalculated the expected lifespan of its beneficiaries. Meanwhile, growth in the overall city payroll is also expected to push pension payments upward.
CalPERS plans to get local government reaction to a proposed new policy that would pay down new pension debt over a shorter period, yielding big savings in the long run but also requiring larger payments in the early years.
Employer rates for current debt or “unfunded liability” would not be changed, Scott Terando, CalPERS chief actuary, told the board last week.
But for new debt from investment losses, the payment period would be shortened from the current 30 years to perhaps 20 years, Terando said, and the higher debt payments from years with investment losses could be offset by lower payments from years with gains.
The average cost of health coverage offered by employers pushed toward $19,000 for a family plan this year, while the share of firms providing insurance to workers continued to edge lower, according to a major survey.
Annual premiums rose 3% to $18,764 for an employer plan in 2017, from $18,142 last year, the same rate of increase as in 2016, according to an annual poll of employers performed by the nonprofit Kaiser Family Foundation along with the Health Research & Educational Trust, a nonprofit affiliated with the American Hospital Association.