Ask Jack Jack Ehnes

Would CalSTRS consider a 125/Cafeteria type plan to help retirees by providing for pre-tax dollars used for medical expenses? This would be a great help to many who have high medical expenses.

Under current pension codes, 125/Cafeteria plans apply to active members and are not a viable offering for retirees. However, in 2008-09 CalSTRS explored the implications of offering health care reimbursement plans and programs that would allow active members to set aside money for health care expense reimbursement for use after retirement.

This effort was to address various challenges that school employers face in providing health benefits to their employees after retirement. However, funds that would otherwise be contributed to support the Defined Benefit Program and Defined Benefit Supplement Program would need to be diverted into a health care reimbursement program.

Given current budget constraints and economic challenges, it is unlikely that such programs will be made available for the foreseeable future.

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