PA Budget Secretary Says Future Retiree Health Care Costs Estimated at $8...( Says Pennsylvania Has Taken Major...),Health

Says Pennsylvania Has Taken Major Steps to Control Costs, Preserve Promised Benefits

HARRISBURG, Pa., May 9 /PRNewswire-USNewswire/ -- Budget Secretary Michael J. Masch today released a final estimate of future state retiree health care costs, saying the $8.5 billion figure represents a commitment by the commonwealth to preserve the benefits that have been promised to retirees in future years through the prudent management of the state's costs for its retiree health program.

"Keeping employee health care costs under control is one of the biggest challenges facing employers today -- in the public and the private sectors," Masch said. "For employers who provide health care benefits to retirees, this is a challenge that extends far into the future.

"Governor Rendell is committed to keeping the promises that his administration and previous administrations have made to state employees to provide them with health care coverage in retirement," he said. "At the same time, Pennsylvania must control retiree health care costs so that the commonwealth has sufficient resources to meet our many other crucial responsibilities -- including providing adequate funding to support public safety, public education, social services and transportation infrastructure."

The commonwealth's initial estimate of its accumulated retiree health benefit obligation was $13.8 billion, Masch said. The final estimate of $8.5 billion is nearly 40 percent lower than the preliminary estimate, and Masch said the reduction results from several proactive steps the Rendell administration has taken to get state retiree health benefit obligations to a more manageable level. These steps include:

-- Requiring retirees to pay a portion of their premium costs. Eligible

employees who retired after June 30, 2005 but before July 1, 2007 must

contribute 1 percent of their final annual gross salary toward their

health care coverag
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