16:42 EST Wednesday
CalPERS OKs rate hikes for long-term care In a move intended to ensure continued stability of its long-term care program, the California Public Employees' Retirement System has approved premium increases beginning in April 2003.
The fee hikes are needed to avert a projected $215 million deficit in the long-term care fund caused by an investment earnings shortfall in the slumping equities market, CalPERS said in a news release.
Approved rate increases ranging from 6 percent to 30 percent had been recommended by program staff, outside consultants and a constituents' advisory group. The new rates will go into effect April 1, 2003, for new policies and on Sept. 1, 2003, for 170,000-plus current members.
The overall 17.4 percent increase includes 11.4 percent to eliminate the projected deficit and a surplus of 6 percent to guard against unforeseen financial developments. The current average premium is $100 per month.
Premium increases for individuals will vary depending on the plan and the age of the member when the policy was issued. Details on how the change will affect individual coverage will be sent to members at least 60 days before it takes effect.
Each member will have the option of accepting their rate increase and maintaining their current coverage or maintaining their current premium cost by decreasing their current coverage amounts.
CalPERS, headquartered in Sacramento, is the nation's largest public pension fund, managing assets of $128 billion. The system provides retirement and health benefits to 1.3 million state and local public employees and their families.
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