A new report by the Legislative Analyst is out:
http://www.lao.ca.gov/2009/bud/fiscal_outlook/fiscal_outlook_111809.pdf
Apart from the general grim outlook for the state, there is a section on higher ed and UC. However, the pension issue is not covered in that section. Rather, it appears on page 38 in a section on state retirement costs.
No Additional State Payments for UC Retirement Programs Assumed. Consistent with past funding practices, our forecast assumes no additional state contributions between 2009‑10 and 2014‑15 to cover costs of UC’s pension and retiree health programs. Both have unfunded liabilities, and currently, no significant contributions are being paid by UC or its employees to the pension program. Unless UC identifies non-state funding
sources for these programs soon, their costs will escalate significantly over the long term.
While this is consistent with LAO’s position, this version is more explicit that the state has no responsibility for the UC pension and somehow the regents should pay for it. It is not clear what non-state sources would pay for the 1/3 of the liability that belongs to the state. Putting in a dollar of state funds gets you another 2 dollars, i.e., 2 for 1. LAO seems to want 3 for 0.
Dan Mitchell, FA Executive Board Member