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SCOE Solves Tough Retiree Health Care Problem

Contract Agreements Establish Trust Fund for Health Benefits


The Sacramento County Office of Education (SCOE) announces the ratification of new three-year contract agreements that will ensure fiscal solvency for present and future retiree health benefits. The agreements, ratified by members of the Sacramento County Office of Education Teachers Association (SCOETA) and California School Employees Association (CSEA Chapter 480), will ensure that the promise of retiree health benefits is backed up with hard cash through a financial trust agreement.

"I applaud our employee leadership for coming together and working so hard on addressing the unfunded liability issue," said David W. Gordon, Sacramento County Superintendent of Schools. "Our newly ratified three-year agreements support our employees in carrying out our mission at SCOE."

An unfunded liability occurs when financial obligations for funding benefits plans exceed the amount those plans contain. Prior to the ratification of these new agreements, SCOE faced an estimated $50-million unfunded liability for retiree health care. Under the new agreements, a trust fund has been established which includes a substantial financial base beginning with a SCOE contribution of $8.5 million. Employees will contribute 1.9% of the 2006 cost of living adjustment (COLA) to the trust, plus 1% of the 2007 COLA into the trust, which will be ongoing.

The trust fund will create a continuing interest stream to finance retiree health benefits into the future.

"I felt very proud of the agreement. We were able to secure funds for lifetime medical benefits for retirees," said Dawn McCarron, President, CSEA Chapter 480. "With the rising costs of health care, it was very critical to address the unfunded liability issue."

The new agreements will also increase life insurance benefits, enroll all teachers in long-term disability coverage and create a catastrophic leave bank that includes all SCOE employees.

"I'm very pleased with the outcome because we got to not only preserve lifetime benefits for retirees and current employees, but we also created an opportunity for new employees to secure lifetime benefits," said Gary Barker, SCOETA President. "In my opinion, that's a real asset to the organization for having the ability to recruit and retain people."

The Sacramento County Office of Education is one of 58 county offices located throughout the state. The 700 full-time and over 2,500 part-time staff of SCOE work year-round providing services which complement and supplement those offered by public school districts in the County of Sacramento. SCOE plays a leadership role in the delivery of quality education to the students in Sacramento County.