Through the collective bargaining process and under the authority of Government Code section 22944.5, OPEB (Other Post-Employment Benefits) is the method by which the State of California, as the employer, and its employees jointly prefund health benefits that active employees will receive as state retirees.
All employees in positions that are eligible for health benefits, whether or not currently enrolled, prefund OPEB. The state prefunds a matching contribution. The OPEB Policy Statement provides the effective prefunding dates of the various employee groups.
OPEB contributions are deposited in the California Employers' Benefit Trust (CERBT). The CERBT is an Internal Revenue Code, Section 115 Trust fund dedicated to prefunding OPEB for all eligible California public agencies, with the State of California being one of the participating employers. The CERBT has uniform requirements, which are:
The cost sharing arrangement of the CERBT is:
The bargaining contracts list the percentages for represented employees and the associated excluded and exempt employees. The CalHR announcement, dated July 17, 2018 and titled, "OPEB Changes Effective July 1, 2018," explains the OPEB percentage of excluded and exempt employees not associated with a bargaining unit.
OPEB contributions are calculated as a percentage of an employee's total pensionable compensation (i.e., all payments with a retirement gross) for a given pay period, with matching employer contributions. Payroll Letter #18-010 from the State Controller's Office provides an example of this calculation. Employees designated R05, S05, and M05 prefund OPEB from a percentage of their base salary for a given pay period, with matching employer contributions.
Retired state employees do not prefund OPEB.
There is not an appeal process for prefunding OPEB.
Employees should contact their human resource offices.