30, 2007 must contribute at the same percentage rate as active
employees, beginning at 1 percent of their final annual gross salary and
rising to 3 percent by October 2010.
-- Redesigning the Retired Employees Health Program. Changes announced in
September, which included adjustments to retiree medical and
prescription plans that are projected to reduce annual cost increases by
approximately $90 million.
-- Establishing a special account for payment of retiree health benefits.
Under an agreement with the state treasurer, the commonwealth will
establish a dedicated account to invest funds to pay for future retiree
health care costs. The earnings generated by these investments will help
reduce the commonwealth's current payments toward future retiree
health care costs.
The commonwealth also periodically rebids its health care and pharmacy contracts to receive better prices, and -- beginning July 1 -- it will extend from 15 years to 20 years the minimum length of time employees need to work for the state in order to qualify for state-paid retirement health benefits.
Even with these changes, the cost for state-paid retiree health care benefits is projected to increase to more than $970 million over the next five years, Masch said.
"We are taking every step we can to reduce health care costs while still preserving benefits for the workers who served the commonwealth for many years," he said.
Masch noted that state and local governments have long been required to
develop and publicly release annual estimates of their accumulated pension
liabilities. Now, under new public accounting rules, beginning this year
state and local governments are also required to develop and make public an
annual estimate of any non-pension benefits they have commi
|SOURCE Pennsylvania Office of the Governor|
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