Why did PEBP give the premium holiday if it was just going to turn around and cut benefits?
Based on how PEBPs funding works from the State, both the premium holiday and the reduction in benefits result in savings for the State. The premium holiday resulted in a cost savings to the State because the subsidy paid by the State was reduced for FY 2009. Due to the continuing decline in the State economy, further reductions have been asked for by the Budget Office. That request is being responded to in PEBPs proposal to reduce the percentage of State subsidy and to reduce benefits. PEBP understands that from the participants perspective, it appears to be a give-back followed by a take-away.
