State

County retirees losing insurance help

About 2,500 public service retirees and other beneficiaries in Stanislaus County won't receive stipends next year to pay for health insurance.

The Stanislaus County Employees' Retirement Association voted Wednesday to suspend the health benefit for 2010. Retirees have received as much as $370 per month to help with the rising cost of health insurance.

It was another setback for public service retirees who have sacrificed benefits this year as the retirement system deals with major losses in its investment portfolio. In April, the retirement board decided not to pay a supplemental cost-of-living increase to 270 older members this year.

Before voting 8-1 to discontinue the stipend, with board member Wes Hall casting the only "no" vote, the board narrowly divided over a proposal to provide a more modest health benefit based on retirement income. It was designed to continue a benefit for retirees most in need.

Hall's motion calling for further study of the proposal failed by a 4-5 vote. Board members Maria De Anda, Mike Fisher, Clarence Willmon and Hall were in support, while Gordon Ford, Jim DeMartini, Mike Lynch, Darin Gharat and Ron Martin were opposed.

Some were concerned about prolonging the issue for weeks so attorneys could study the legal ramifications of the proposal.

"The first thing we need to do is stop the bleeding," Lynch said, referring to a pension fund that has lost hundreds of millions in value since early 2007. He said he wasn't opposed to funding the health benefit in future years if the pension fund is at a sustainable level.

Gharat said he doubted it was appropriate to give the health benefit to some members, while excluding others who have earned the benefit.

About 200 retirees and employees attended the meeting in the county Board of Supervisors chamber. StanCERA administers pension benefits for retired employees of the county, the city of Ceres, Superior Court and five special districts.

Speakers told the board that suspending the health stipend will hurt older retirees, such as a 100-year-old retired worker who needs the money to pay monthly premiums.

Rex Cline, a retired coroner's office employee, said his medical premiums have quadrupled since his retirement six years ago. "I can go out and work," he said, "but that 100-year-old lady can't."

An official with Retired Employees of Stanislaus County read a letter responding to recent board decisions to take away benefits. The group is seeking legal counsel and weighing its options, the letter said.

The retirement association must give its members 90 days' notice that the health benefit will end Dec. 31. The board will decide next year whether to pay the benefit in 2011.

Since 1981, the health stipend and other extra benefits have cost the retirement system about $80 million. The extra benefits are not guaranteed to employees when they retire.

The association has funded the nonvested benefits through excess earnings on investments, and financial experts have told StanCERA not to expect excess earnings for several years.

In April, StanCERA members were angered when the board decided to transfer $60 million in nonvested benefit reserves so the county could avoid paying an additional $22.7 million this year to shore up the pension fund.

Bee staff writer Ken Carlson can be reached at kcarlson@modbee.com or 578-2321.

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