Dec 16, 2014 4:10 PM by News Staff
SACRAMENTO, Calif. (AP) - California's unfunded obligation to pay for the health and dental care of retired state government workers grew by 11 percent in the most recent fiscal year to nearly $72 billion.
In a report issued Tuesday, state Controller John Chiang proposed a five-year plan to start pre-funding the benefit, which is rare in the private sector.
Retiree health care is an obligation of state government similar to public employee pensions, a system that also is badly underfunded. Unlike pensions, however, the cost of providing health care to retirees is handled annually on a pay-as-you-go basis.
Longer life spans are one reason the cost has soared by $24 billion in just the past eight years. The controller says doing nothing about it "will be sowing the seeds of a future crisis."
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