County officials will confront public sector retirees before the California Supreme Court Oct. 3 in a potentially precedent-setting case involving retiree medical benefits.

In 2006, the Orange County Board of Supervisors, working with the Orange County Employees Association, slashed medical benefits for about 6,500 public sector retirees. The deal saved taxpayers $815 million.

Both sides have touted the agreement as an example of cooperation yielding results.

But retirees allege that changing their medical benefits after retirement is illegal. They argue that the monthly outlay for medical payments, granted since 1993 with pension benefits, is a vested right. County officials have consistently insisted that the benefit is not vested.

At stake is nearly $1.4 billion in unfunded liability facing Orange County taxpayers for the retiree medical insurance program. The ruling could have implications for nearly every public jurisdiction in California, many of which are facing similar unfunded liabilities.


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