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Other Post-Employment Benefits (OPEB) FAQs

​What is OPEB?

 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.

Who prefunds OPEB?

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.

​Where does the money go?

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:

  1. A participating employer must be a governmental entity (i.e. a political subdivision or instrumentality of the state).
  2. Contributions to the CERBT must be made for the purpose of satisfying one or more binding legal OPEB obligation of the participating employer. CERBT assets must be accumulated and applied exclusively to satisfy the OPEB obligations of participating employers.
  3. The sole purpose of the CERBT is for retirees and their eligible dependents to receive OPEB.

​Can employees opt out of prefunding OPEB?

The cost sharing arrangement of the CERBT is:

  1. Employee contributions are mandatory under the following conditions:
    • Contributions must be mandatory. Employees are not permitted to elect in or out of participation.
    • Contribution rates must be uniform for all participating employees. Employees cannot elect to vary their individual contributions. Contribution rates may vary by bargaining unit.
    • No cash-out of mandatory employee contributions is permitted at any time. Employees have no claim or right to the CERBT assets.
  1. Voluntary or elective employee contributions are not permitted, including one-time irrevocable elections.
  2. The CERBT does not separately account for contributions of any employee, former employee, or dependent. All CERBT contributions are assets of the participating employer. No employee, former employee, or dependent has a claim or right to any CERBT assets.

​How much do employees prefund?

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.

Do state retirees prefund OPEB?

Retired state employees do not prefund OPEB.

​Can I appeal prefunding OPEB?

There is not an appeal process for prefunding OPEB.

Whom do I contact with questions about OPEB?

Employees should contact their human resource offices.

  Updated: 9/11/2018
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