Our Retirees Depend On
THE WAY IT IS NOW
San Francisco’s Office of the Controller issued a report which benchmarked San Francisco’s current unfunded healthcare liability at $4.4 billion, representing the future cost of providing retiree health care benefits earned by current employees and retirees.
San Francisco’s liability, which breaks down to $13,487 per household, is funded on a pay-as-you-go basis out of the general fund, and only 1 percent of the $4.4 billion cost has been saved. Currently, we are paying approximately $150 million out of our General Fund into retiree healthcare. This number is projected to rise to over $500 million in the next 20 years, and beyond.
Prop B in 2008 and Prop C in 2011 made significant progress toward fully funding the Retiree Healthcare Trust Fund (RHCTF) by requiring city employees to contribute more into the fund. However, the RHCTF is allowed to be drained in 2020, which would negate any effort to move to a fully-funded model, and ultimately reduce general fund annual contributions.
WHAT PROP A ACCOMPLISHES
Proposition A fixes San Francisco’s $4.4 billion unfunded retiree Health Care liability, by preventing the Retiree Healthcare Trust Fund from being raided, without increasing employee contributions and without reducing retiree health care benefits.
- Proposition A prevents the City from raiding the RHCTF for uses other than paying retiree healthcare benefits.
- Proposition A eliminates our City’s $4.4 billion liability in about 30 years.
- Proposition A switches from a pay-as-you-go model, to a fully funded model to pay for our retiree healthcare costs now and in the future.
- Proposition A provides a more balanced generational equity where the current generation of workers and taxpayers pays the costs for the current generation’s benefits.
- Proposition A will result in major cost savings for San Francisco and future tax payers and employees, as prefunded assets earn investment income that will be used to pay portions of the benefit costs.
- Proposition A will improve San Francisco’s bond rating, saving taxpayers money on voter-approved debt.
- Proposition A establishes an expert panel to oversee the HCRTF composed of the Controller, Treasurer, Executive Director of the San Francisco Employee Retirement System, and one current and one former city employee appointed by our City’s Health Services System Board.
PROP A SUPPORTERS
Mayor Ed Lee, all 11 member of the San Francisco Board of Supervisors, IFPTE Local 21, SF Firefighters Local 798, SF Police Officers Association, Municipal Employees Association (MEA), Alliance for Jobs and Sustainable Growth, The San Francisco Chamber of Commerce, San Francisco Council of District Merchants Association, Protect Our Benefits.