1422 - Other Post-Employment Benefits (OPEB) Prefunding

Category

Benefits and Insurance

Audience List

  • Accounting Officers
  • Chiefs of Administration
  • Personnel Officers
  • Personnel Transactions Staff
  • Personnel Transactions Supervisors

Synopsis

This policy

  • explains the application of prefunding Other Post-Employment Benefits (OPEB).

Introduction

OPEB addresses unfunded retirement health care by prefunding future health benefits for retired members.

Statement

Prefunding OPEB is negotiated through the state collective bargaining process and pursuant to Government Code sections 22940 through 22944.5.  The effective prefunding dates and contribution percentages for each bargaining unit (BU) are in the Memoranda of Understanding, accessible from the Bargaining Contracts link in the Authorities section of this policy.  They are also outlined in the aforementioned statutes.

  • Bargaining Unit 1, effective date July 1, 2018.

  • Bargaining Unit 2, effective date July 1, 2017.

  • Bargaining Unit 3, effective date July 1, 2018.

  • Bargaining Unit 4, effective date July 1, 2018.

  • Bargaining Unit 5, effective date July 1, 2009.

  • Bargaining Unit 6, effective date September 1, 2016.

  • Bargaining Unit 7, effective date July 1, 2017.

  • Bargaining Unit 8, effective date July 1, 2017.

  • Bargaining Unit 9, effective date July 1, 2017.

  • Bargaining Unit 10, effective date July 1, 2017.

  • Bargaining Unit 11, effective date July 1, 2018.

  • Bargaining Unit 12, effective date July 1, 2013 (directly associated excluded employees, effective July 1, 2017).

  • Bargaining Unit 13, effective date July 1, 2017.

  • Bargaining Unit 14, effective date July 1, 2018.

  • Bargaining Unit 15, effective date July 1, 2018.

  • Bargaining Unit 16, effective date July 1, 2013 (directly associated excluded employees, effective July 1, 2017).

  • Bargaining Unit 17, effective date July 1, 2018.

  • Bargaining Unit 18, effective date July 1, 2017.

  • Bargaining Unit 19, effective date July 1, 2017.

  • Bargaining Unit 20, effective date July 1, 2018.

  • Bargaining Unit 21, effective date July 1, 2018.

OPEB General Information

All employees in positions that are eligible for health benefits, including Permanent Intermittent (PI) positions, must contribute.  If a PI employee began contributing towards retirement but is currently not eligible for health benefits, the employee will continue to contribute towards OPEB. 

Employees who are not members of a state retirement plan, including Part-Time, Seasonal, and Temporary (PST) retirement program members, will not contribute.  For a list of classifications that do not prefund OPEB, please view the “Seasonal Classifications Not Subject to OPEB” document on the Benefits Administration tab of the CalHR State HR Professionals page. 

New hires and state employees appointed to positions designated to a specific bargaining unit, directly associated with a specific bargaining unit, or excluded or exempt from collective bargaining, after the OPEB prefunding effective date, will prefund OPEB immediately, unless they are ineligible for health benefits based on their appointment tenure and time base. Employees who are not subject to OPEB prefunding due to their tenure and time base will contribute if they are appointed to a position that is eligible for health benefits.  

OPEB contributions are withheld on a pre-tax basis, except for employees receiving disability benefits that require the contributions to be withheld post-tax, as determined by the State Controller's Office (SCO).

If an employee is in a position subject to OPEB and in an additional position not subject to OPEB, the employee will prefund only from the position that is subject to OPEB.

OPEB contributions are not recoverable under any circumstances by the employee, their beneficiary, or survivor.

The costs of administering payroll deductions and asset management are deducted from the OPEB contributions and/or OPEB account balance.

The OPEB contributions are maintained within the California Employers’ Retiree Benefit Trust (CERBT) in separate sub-accounts at the aggregated bargaining unit level, not at the individual employee level.

The following parameters pertain to withholding OPEB contributions from the base salary:

A.  The OPEB contribution is applied monthly regardless of the employee’s pay frequency (e.g., monthly, semi-monthly, or bi-weekly).

  1. For positive pay employees paid monthly, the OPEB contribution is based on the hours paid the previous month.
  2. For positive pay employees paid semi-monthly, the OPEB contribution is based on the hours paid the previous month and is deducted from the second warrant during each monthly pay period.
  3. For positive pay employees paid bi-weekly, the OPEB contribution is based on the hours paid for the previous month.

B.  OPEB contributions are not reduced due to fluctuations in gross salary, such as when unpaid leave is taken under the Family Medical Leave Act (FMLA).

C.  For employees with a single hourly appointment, the OPEB contribution is withheld up to the amount that would have been withheld if the employee worked in a full-time appointment.

D.  For employees with a full-time appointment and an additional appointment (e.g., hourly), the OPEB contribution is withheld from the full-time appointment only.

E.  For employees with multiple part-time or hourly appointments, the OPEB contribution is deducted from all of the appointments, up to the amount that would have been withheld if the employee worked in a full-time appointment.

F.  If an employee has multiple hourly appointments, the highest salary rate is used to compute what the OPEB contribution would be if the employee held a full-time appointment at that salary rate.  This amount serves as the cut-off.  For employees with a part-time and an hourly appointment, the OPEB contribution amount is calculated based on the part-time appointment salary rate.

OPEB Contributions From Pensionable Compensation (BUs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, and 21)

OPEB contributions are deducted from the total pensionable compensation of each pay period.  Pensionable compensation is any pay that is subject to retirement contribution, e.g. regular pay, Industrial Disability Leave, holiday pay, pay differentials, shift differential, and special pay.

Please note:  BUs 12 and 16 began prefunding OPEB from pensionable compensation instead of base salary effective July 1, 2017, whereas BU 5 began on July 1, 2020.

Excluded and Exempt Employees Directly Associated with a Bargaining Unit

Excluded and exempt employees directly associated with a bargaining unit, e.g., C01-21, E01-21, S01-21, M01-21, and M99, prefund the same OPEB percentage under the same schedule as the bargaining unit employees. Exceptions are outlined in the “Additional Exempt and Excluded Classifications Prefunding OPEB with a Bargaining Unit” document on the Benefits Administration tab of the CalHR State HR Professionals page.

Excluded and Exempt Employees Not Directly Associated with a Bargaining Unit

Excluded and exempt employees not directly associated with a bargaining unit, e.g., E48, E59, E68, E79, E97, E98, and E99, prefund 0.8 percent effective July 1, 2018, 1.6 percent effective July 1, 2019, and 2.4 percent effective July 1, 2020 towards OPEB from their pensionable compensation.  The employee OPEB contribution is temporarily suspended effective July 1, 2020.

OPEB Deposits

OPEB contributions are deposited in the designated state sub-account for each bargaining unit in the Annuitants' Health Care Coverage Fund.

The OPEB contribution on the employee pay warrant is indicated as “OPEB/CERBT.” CERBT stands for the “California Employers' Retiree Benefit Trust.”

Departments that process their own payroll and are not part of the SCO Uniform State Payroll System submit OPEB contributions to the California Public Employees’ Retirement System (CalPERS) CERBT in the following manner:

  • Timing of contributions to the CERBT may be decided upon by your entity. Options include but are not limited to: biweekly, monthly, semi-monthly, quarterly, semi-annually, or annually. There is no minimum amount required to submit a contribution.
  • OPEB contributions may be transferred electronically or by check to CalPERS. CERBT accepts two forms of Electronic Fund Transfers (EFT): wire transfer and Automated Clearing House (ACH) credit method. The appropriate contribution form must be submitted with the method of contribution. The link to the form accompanying the check submittal is in the Forms section of this policy. For EFT contributions, please email CERBT4U@calpers.ca.gov to receive the EFT instructions and CERBT Contribution Form. 
  • For Departments that wish to contribute one payment covering multiple sub-accounts, they must submit a CERBT Sub-Account Contribution Form along with the Contribution Form. The CERBT Sub-Account Contribution Form provides CalPERS direction on the amount that should be attributed to each sub-account from one payment submission. The link to the Sub-Account Contribution Form accompanying the Contribution Form and contribution submittal is in the Forms section of this policy.

State of California Account Numbers and Corresponding Bargaining Unit Account Name:

CERBT Account NumberState of California Sub-Account Name
 5402440716-001BU 5 - California Highway Patrol
 5402440716-002BU 16 - Physicians, Dentists, and Podiatrists
 5402440716-003BU 12 - Craft and Maintenance
 5402440716-004BU 6 - California Correctional Peace Officers Association
 5402440716-005BU 9 - Professional Engineers in California Government
 5402440716-006BU 10 - Professional Scientists
 5402440716-007BU - State Employees of the Judicial Branch (Excl. Justices/Judges)
 5402440716-008BU 2 - California Attorneys, Administrative Law Judges, and Hearing Officers in State Employment
 5402440716-009BU 7 - California Statewide Law Enforcement Association
 5402440716-011BU 8 - California Department of Forestry and Fire Protection Firefighters
 5402440716-012BU 13 - International Union of Operating Engineers (IUOE)
 5402440716-013BU 18 - California Association of Psychiatric Technicians
 5402440716-014BU 19 - American Federation of State, County and Municipal Employees
 5402440716-015BU - Service Employees International Union 1, 3, 4, 11, 14, 15, 17 ,20, & 21
 5402440716-016State of California - Excluded/Exempt

 

Application

Not Applicable.

Authorities

Resources

FAQs

Forms

PML

  • PML 2013-025: PML 2013-025 - 8/9/2013 - Bargaining Unit 12 and 16 Other Post-Employment Benefits (OPEB) Prefunding
  • PML 2013-033: PML 2013-033 - 10/1/2013 - Instructions for Departments that Submit Other Post-Employment Benefits (OPEB) Contributions Directly to CalPERS
  • PML 2014-042: PML 2014-042 - 11/7/2014 - Bargaining Units 12 and 16 Other Post-Employment Benefits (OPEB) Prefunding—Participation and Payroll Deductions
  • PML 2016-027: Other Post-Employment Benefits (OPEB) Prefunding Implementation–Bargaining Unit 6 – 10/6/2016

Web Pages

Authorized By

Adria Jenkins-Jones
Chief Deputy Director, Executive Office

Contact Person

Angela Acker
Health Policy Analyst , Health Policy
Phone: 916-322-9795
Fax: 916-322-3769
Email: angela.acker@calhr.ca.gov

Superseded Policies

Not Applicable.

History

View History

Table of Contents

1000 - Equal Employment Opportunity

1100 - Selection

1200 - Appointments

1300 - Exempt Employees

1400 - Benefits and Insurance

1500 - Work Schedules

1600 - Third Party Pre-Tax Parking

1700 - Compensation

1800 - Savings Plus

1900 - Bona Fide Associations

2000 - Collective Bargaining

2100 - Leave

2200 - Travel/Relocation

2300 - State Owned Housing

2400 - Employee Recognition

2500 - Discipline

2600 - Layoffs

2700 - Retirement

2800 - Training

2900 - Workforce Planning

3000 - Examination and Hiring

3100 - Drug-Free Workplace

3200 - Controlled Substance Abuse Testing Program