Will There Be a Pension Lawsuit Over the Cap for the Highly Paid?
The upcoming Regents agenda contains a mix of open sessions and closed sessions. One closed session involves a sensitive pension issue to be discussed in private by the Committee on Compensation.
Readers of this blog with long memories will recall a controversy that erupted when certain highly-paid UC administrators complained that a cap – based on IRS rules – on their pensions should be removed. The cap limits the amount of the basic pension to the first $245,000 of pay. Essentially, back in the day when folks didn’t worry much about pension funding, the Regents applied for an exemption from the cap. By the time they got it, we were no longer in back in the day and the Regents never modified the plan to lift the cap. The administrators claimed that the cap should have been lifted – creating unwanted negative publicity about the UC retirement system. In the end, the Regents rejected the claim. See, for example,
http://articles.latimes.com/2011/jan/05/local/la-me-uc-pensions-20110105
Apparently, that rejection has not ended the matter. The March 28 closed session of the Committee on Compensation lists the following item:
University of California Retirement Plan – Potential Litigation Regarding Program Linked to Compensation Cap
See http://www.universityofcalifornia.edu/regents/regmeet/mar12/compxx.pdf
Since the session is closed, however, there may be no further information available. A lawsuit on this matter, if one is filed, would come at a time when UC is trying to make the case that it should not be subject to the statewide plan proposed by the governor. The timing could not be worse.
