The State Worker

CalPERS in settlement talks in $1 billion long-term care insurance lawsuit

A judge has postponed a trial in a $1.2 billion lawsuit against CalPERS over an 85 percent price hike to its long-term care insurance policies.

The trial, which had been scheduled to start Oct. 30, has been moved to April 13 to make time for settlement talks, according to court filings.

The lawsuit, filed in 2013, alleges CalPERS violated contracts when it hiked premiums by 85 percent for about 100,000 public employees after promising stable prices in marketing materials.

CalPERS, the nation’s largest public pension fund, has said it had the authority to increase the rates and did so solely to keep the plans sustainable.

Judge William Highberger warned CalPERS in July it faces serious financial risk in the lawsuit — plaintiffs estimate $1.2 billion — if it goes to trial. The trial is known as Sanchez vs. CalPERS.

Settlement talks were scheduled in September and early this month. Another round is scheduled for November, said plaintiffs’ attorney Michael Bidart. Bidart declined to discuss details.

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Wes Venteicher anchors The Bee’s popular State Worker coverage in the newspaper’s Capitol Bureau. He covers taxes, pensions, unions, state spending and California government. A Montana native, he reported on health care and politics in Chicago and Pittsburgh before joining The Bee in 2018.