OPEB Funding Level

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Target: 100% by 2043

Health benefits are provided to retired City employees under terms adopted by voters and contained in the City Charter. These benefits, often referred to as Other Post-Employment Benefits (OPEB), are administered by the City’s Health Service System. In recent years, the voters have adopted a series of proposals designed to shift for payment of these benefits from a pay-as-you-go approach (where benefits are paid for as they used) to a prefunded model (where money is set-aside for them as the benefits are earned). Over time, the prefunded approach will ultimately reduce and stabilize the City’s OPEB costs. As required by governmental accounting standards, the City conducts an actuarial valuation every two years to measure the future cost of these earned benefits versus funds set-aside to pay for them.


How San Francisco is Performing

As of March 2018, the Controller's Office estimates a total liability of nearly $4.3 billion, of which 4.4 percent has been set-aside in the voter-adopted trust fund. Voters approved changes in recent years to establish the trust, reduce benefit levels for new employees, and require incrementally increasing trust contributions by the City and employees. Beginning in 2009, the City and newly hired employees contribute to a Retiree Health Care Trust Fund, which will be used to pay for future costs of a lower retiree health benefit level. Beginning in 2016, additional contributions to this fund on behalf of pre-2009 hires are also required by both employees and the City.

The City’s unfunded liability is projected to continue to grow for many years, albeit at a slower rate, given that the City’s employees’ prefunding contributions are less than the interest due on the accumulated liability. Recent actuarial valuation projections predict that the City will gradually reduce its accumulated unfunded liability and reach a fully-funded status by 2043, with employer contributions not exceeding 10 percent of payroll.

Additional Information

View the most recent OPEB valuation.


Please click first on the chart above and then click the “Download” button in the bottom right corner of the visualization to view and download the data displayed in the chart.