UC Needs to Get Off the State Pension Train Before It Goes Too Far
As we have noted many times, the Regents modified the UC pension plan back in December 2010 to deal with its funding issues. Since that time, the risk has been that UC would be swept into some statewide pension reform really aimed mainly at CalPERS and CalSTRS. UC needs to get off that train before it is too late.
The excerpt below from a recent news report indicates that the train is rolling and so far we are on board. UCOP and the Regents need to be involved in legislative discussions.
…At a hearing of the Legislature’s Conference Committee on Employee Pensions last week, an executive of the State Teachers Retirement System spelled out a possible way forward.It’s called a “cash balance” retirement plan, a little-known tax-advantaged option available to both public and private employers. It works like a 401(k) plan in that each worker has an individualized account and his or her benefits are determined by how much it has accumulated at the time of retirement. It is superior to a 401(k) plan in that the funds are administered at very low fees by professional managers with a large, well-balanced portfolio. Because of that, workers are guaranteed a small return on their accounts.