Board of Retirement Approves Health Allowance and Pension Supplement

At the May 3, 2007 meeting, the Board of Retirement approved the following health allowance and supplemental benefit allowance for members:

1.The current health allowance for Tier I and Tier II members will continue in its current state. The health allowance remains a non-vested benefit, and the eligibility rules and dollar amounts are the same: the maximum is still $400. These benefits are to be funded by County contributions, rather than SDCERA’s excess earnings.

2. Eligible Safety members who retired under the 3% at 50 benefit and eligible Tier A retirees will receive a non-vested taxable pension supplement instead of a health allowance beginning July 1, 2007. These benefits are to be funded through current reserves and possible future excess earnings.

The taxable pension supplement will be paid to all eligible Safety members who retired under the 3% at age 50 benefit and eligible Tier A retirees, if they have 10 or more years of eligible service credit. Members with 10 years of service will be eligible for the minimum supplement of $200. The supplement then increases incrementally for each additional year of service credit up to a maximum of $400 for members with 20 or more years of service credit. Because it is a supplemental benefit (not a health allowance) there are no restrictions on how these retirees use this money. By providing members with this taxable supplement, the Board of Retirement retains access to group health plans for these members.

3. Tier A members and Safety members covered by the 3% at age 50 benefit who retire after July 1, 2007, will also be eligible for the non-vested taxable pension supplement.

In the same vote, the Board of Retirement approved pre-funding the STAR COLA, which makes the STAR COLA a permanent part of the retirees’ allowance for life for those currently receiving this benefit.

SDCERA is notifying the County of this action. Please continue to check our web site for future developments.