1422 - Other Post-Employment Benefits (OPEB) Prefunding (Historical View)

** Effective: 10/9/2018 1:51:30 PM - 10/9/2018 2:13:25 PM **

Status: Active

Change Notes

Made a few grammatical edits.

Category

Benefits and Insurance

Audience List

Synopsis

This policy

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.  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.

OPEB General Information

All employees in positions that are eligible for health benefits, including Permanent Intermittent (PI) positions, must contribute.  If a PI employee has begun 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 HR Net. 

New hires and state employees appointed to positions in bargaining units after the OPEB prefunding effective date will contribute towards OPEB immediately, unless they are not eligible for health benefits based on the tenure and time base of their appointment. 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 have deductions withheld only from the appointment that is subject to OPEB.

OPEB contributions are not recoverable under any circumstances by the employee or his/her beneficiary or survivor.

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

OPEB Contributions from Base Salary (BU 5)

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

A.  The OPEB contribution will be 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 will be based upon the hours paid the previous month.

2.     For positive pay employees paid semi-monthly, the OPEB contribution will be based upon the hours paid the previous month and will be taken from the second warrant during each monthly pay period.

3.     For positive pay employees paid bi-weekly, the OPEB contribution will be based upon 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 taken 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 upon the part-time appointment salary rate.

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

OPEB contributions will be taken 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 contribute towards OPEB from pensionable compensation instead of base salary effective July 1, 2017.

Excluded and Exempt Employees 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, will contribute the same OPEB percentage under the same schedule as the employees in the bargaining unit. Exceptions are included in the “Additional Exempt and Excluded Classifications Prefunding OPEB with a Bargaining Unit” document on HR Net.

Excluded and Exempt Employees Not 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, will prefund OPEB from their pensionable compensation beginning July 1, 2018.  

OPEB Deposits

OPEB contributions will be deposited in the designated state subaccount for each bargaining unit in the Annuitants' Health Care Coverage Fund.

The OPEB contribution on the employee pay warrant is indicated as “CERBT,” which 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) OPEB fund, CERBT in the following manner:

Application

Not Applicable.

Authorities

Resources

Forms

PML

Web Pages

Authorized By

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.