CSU-ERFSA Executive Committee Approves Resolution Asking CA Legislature to Protect CalPERS Long-Term
Updated: 4 days ago
The State's budget is rolling with dough. It would be a positive step if the legislature provided funds for the shortfall in the Long-Term Care program. The funds should not come from the CalPERS pension fund.
The following resolution was approved on June 7, 2021 by an email vote of the California State University Emeritus and Retired Faculty & Staff Association Executive Committee
Whereas: The CalPERS Long-Term Care Program created by the CalPERS Long-Term Care Act as amended currently is in serious financial difficulty with a shortfall of approximately $2.1 Billion in funds available to pay current policyholder contracted benefits, and
Whereas: Serious errors were made in the design and implementation of the program resulting in a series of premium increases for policyholders that cumulatively are approaching 1,000% for those who enrolled in the program in response to early aggressive marketing for policies with lifetime benefits and inflation protection, and
Whereas: These premium increases have been significantly higher than those of comparable long-term care policies from licensed commercial insurers, and
Whereas: New enrollment in the program has been suspended, and
Whereas: The average age of the current policyholders is about 75, and
Whereas: There is a high likelihood that a class-action suit against the program now in the courts will succeed, further reducing the ability of the program to pay contracted benefits, and
Whereas: The fragile financial condition of the program may require the phasing out of the CalPERS Long-Term Care Program.
Therefore be it Resolved: (1) That the California Legislature amend the CalPERS Long-Term Care Act to permit state and CalPERS funds to be used to cover the contracted benefits of those policyholders that remain in the program until such time as all remaining policyholders either have exhausted all of their contracted benefits or have passed away - without any further increases in premiums, and (2) to ensure that in the event of a favorable ruling for the plaintiffs in the current class action suit, no rate increases will be imposed on policyholders to satisfy the judgement.