pension

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Audio of Regents Meeting of 12-13-10: UCOF Approval & Post-Employment Benefits Plan Approval

Byuclafaculty

Below are links to the audio of the Regents meeting of 12-13-10. There are 13 segments. (A couple of minutes of noise at the beginning of Part 1 have been omitted during which there were problems in linking two locations. The meeting officially began once the link was established.) At this meeting, the Regents approved the UCOF (University Committee on the Future) report as well as the Yudof plan for post-employment benefits (pension & retiree health care). The Regents meeting took place with a video link to UCLA where some Regents attended. As the previous post on this blog noted,…

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UC Pension Solutions and the External Threats to Them

Byuclafaculty

In prior posts, I have noted that while the Regents can modify the UC pension plan in response to its underfunding problem, their actions could be overridden by external forces such as a ballot initiative covering all public pensions in California. Now comes word of another external threat, Congressional legislation that would effectively force public pensions to use a risk-free interest rate assumption in calculating their unfunded liabilities. The proposed legislation apparently would not technically force public pension authorities to do so but it would deny tax-favored status to their municipal bonds if they did not. I was alerted to…

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The New Pension & Retiree Health Care Plan to be Considered by the Regents Now on the Web

Byuclafaculty

The post-employment benefits plan (pension and retiree health care) proposed by President Yudof is now on the Regents’ website for consideration at the December 13 special meeting of the Regents. It is what was previously presented at the November meeting. As previous posts have noted, there will be a two-tier pension plan. It is unclear whether incumbent employees will have the option to switch to the new lower tier. An IRS approval would be needed for that option to be offered. The proposal is at http://www.universityofcalifornia.edu/regents/regmeet/dec10/j1.pdf I am not expecting a great deal of controversy among the Regents on this…

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How High Can the Employee Contribution Climb in UCRP? A Message from Dwight Read

Byuclafaculty

How High Can the Employee Contribution Climb in UCRP? Dwight Read, Chair, UCLA Faculty Association Now it is 2% of salary, next year, 3.5%, then 5%. But what will it be in 2017? …24%? In a special meeting scheduled for Dec. 13, the Regents will decide whether to introduce a New Pension Tier at UC for all new hires as of July 1, 2013. At the November Regents’ meetings, President Yudof presented a proposal for the New Tier that set the annual cost of the plan at 15.1% of retirement covered compensation with contribution rates at 8.1% for employers and…

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New Pension Initiative Could Override Regents’ Action

Byuclafaculty

I have noted in prior posts that UC’s plans for its retirement program could be overridden by a ballot initiative. A new pension ballot initiative is in the works. In the past, no pension initiative made it on to the state ballot. The closest such an initiative has come was in 2005 as part of the governor’s “Year of Reform” effort. In that case, the initiative was pulled due to a controversy over the impact on survivor benefits of public safety workers. While it costs only $200 to file an initiative, getting the signatures in practice requires hiring signature gathering…

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December Brings a Special Legislative Session on the State Budget

Byuclafaculty

One of Governor Schwarzenegger’s last major actions was to call an emergency session on the state budget. Although he is a lame duck at this point and will be out of office in early January, the legislature begins anew in December. The state is carrying a legacy debt of about $6 billion in the general fund (i.e., the fund is projected to close on June 30, 2011 with a negative balance of -$6 billion). A projected operating deficit on a workload basis for next year – the year beginning July 1, 2011 – is about $19 billion. Of course, we…

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Regent Gould Talks About Pensions, Tuition, Concerns About Creating New Programs, and Anderson Self-Sufficiency

Byuclafaculty

UC Regents Chair Gould Talks Funds, Pension Plan Jordan Bach-Lombardo, November 30, 2010, Daily Californian http://www.dailycal.org/article/111368/uc_regents_chair_gould_talks_funds_pension_plan The Daily Californian interviewed UC Board of Regents Chair Russell Gould – who previously served as director of the California Department of Finance from 1993 to 1996 – on Nov. 23 about the University of California’s pension fund, which is facing significant changes due to its multibillion dollar funding deficit. Since the state halted contributions to the pension fund in 1990, the fund’s liabilities grew as its assets shrank, resulting in a $14 billion deficit as of August 2010. The regents voted in September…

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Academic Council Endorses Yudof Plan on Retirement Benefit Changes

Byuclafaculty

The Academic Council has endorsed the Yudof proposals for changes in post-employment benefits (pension, retiree health care) that will presumably be adopted by the Regents at the December special session. Below is the text of a letter confirming the endorsement. I have verified that the letter is a public document, although – at this writing – it has not yet been posted on the systemwide Senate website. November 24, 2010 MARK YUDOF, PRESIDENT UNIVERSITY OF CALIFORNIA Re: Post-Employment Benefits Dear Mark: I am pleased to advise you that at its meeting on November 22, 2010, the Academic Council unanimously endorsed…

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Guest Op Ed: The UCRP Train Wreck

Byuclafaculty

The UCRP Train Wreck Professor Steven LippmanGeorge W. Robbins Chair in ManagementUCLA Anderson School of Management UCOP intends for the employers’ contribution to UCRP be ratcheted up to 20% by July 1, 2017. The now-planned contribution of 20% from all employers of UC personnel (which includes NIH and other granting agencies as well as the hospitals and medical centers) and 7% from all employees falls short of preventing the current $13 Billion underfunding at UCRP from worsening. At present, employees plus employers pay in 6% of the $8 billion covered compensation (CC) which amounts to $480 million per year. This…

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Straws in the Wind on External Pension Agitation

Byuclafaculty

From time to time, I post a reminder that the pension reform movement could lead to a state ballot initiative that could override UC’s apparent move to a two-tier plan modeled on Option C. Here are two recent illustrations. Sanders proposes no pensions for new city hires: New employees would get 401(k) accounts; current workers not affected (excerpt) By Craig Gustafson November 19, 2010, San Diego Union-Tribune Mayor Jerry Sanders has proposed eliminating pensions for new non-public safety hires and giving them 401(k) accounts instead… Sanders said Friday he’ll gather signatures to put a measure before city voters that would…