pensions

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Is the UC Pension Fund Other People’s Money?

Byuclafaculty

The LA Times today is running a story about a group that wants the UC Regents to divest their funds from “fossil fuels.”  [If you listen to the recordings of past Regents meetings on this blog, you can hear the group’s representatives speak at recent public comment sessions.]  We have a student regent-elect who has pushed in the past to divest from Israel.  When a school shooting incident occurred in Connecticut not so long ago, UC divested from gun companies.  Court decisions regarding public disclosure of info from UC investments in private equity funds have made it difficult for UC…

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I know it’s unpleasant to hear but…

Byuclafaculty

When you listen to Regents’ comments at their meetings on the state budget, you have the impression at times that they think that the state and governor have reversed course and now acknowledge responsibility for the UC pension plan.  So, for the record, here is the Legislative Analyst’s summary of the latest state budget and the UC pension: Contains Intent Language Regarding UC Retirement Costs. The budget plan does not designate any funding for UC employer retirement costs, though the university expects these costs to increase by $67 million in 2013-14. Budget trailer bill language states, however, that the absence of…

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Does everything have to be seen?

Byuclafaculty

From time to time on this blog, we have pointed to the issue of privacy and potential ID theft posed by the practice of certain newspapers posting public employee and pensions by name.  While courts have seemed to see the handing over of raw payroll data as a required public disclosure, we have noted that whatever purposes such posting has – ostensibly “good government” – could be accomplished using job titles without names, statistical distributions, etc. It may seem at this point that nothing more could be said or done about the impact on UC.  Note that private universities face…

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Looking Under the Egg

Byuclafaculty

The latest “Our University” newsletter from UCOP has an article about the increase in pension contributions recently enacted by the Regents.  When you look at the newsletter, there is a illustrative “nest egg” illustration – shown above – which you click on to read the article.  Now it’s not clear what the chart below the egg shows.  But let’s hope the downward falling line on the chart under the egg isn’t the future funded status of the pension plan.  As readers of this blog will know, while back in the day, the plan was (more than) fully funded, the long…

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Timing is Everything

Byuclafaculty

The official UC announcement of the Napolitano appointment as president this coming September makes the following point:…By virtue of her appointment beginning after July 1, 2013, she will be included under the new tier of the UC Retirement Program.  Full release at http://www.universityofcalifornia.edu/news/article/29782. What is there to say?  Timing is everything and she’s too late:

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The Gay Marriage Decisions: What Do They Mean for UC?

Byuclafaculty

As the preliminary reports and analysis of the U.S. Supreme Court’s rulings on gay marriage appear, you may be wondering what effect it might have on U.C., particularly with regard to benefits.  Or maybe you are not wondering since you know that U.C. has provided dependent benefits for domestic partners.  There is actually an effect through the federal tax system.  The now-defunct Defense of Marriage Act (DOMA) meant that the IRS did not recognize gay marriages, even in states where such marriages were permitted.  Thus a spouse/dependent in such a relationship, even if eligible for, say, coverage under his or…

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Shying Away from Retiring

Byuclafaculty

Inside Higher Ed today carries an article about surveys of faculty who say they don’t plan to retire at the “normal” age or maybe ever.  The work-til-you-drop response is attributed to such motivations as wanting to be intellectually active but also importantly to concerns about having sufficient funds and health insurance to retire.  When UC was considering changing its retirement plan – it created a two-tier program – it retained the defined benefit approach rather than switch to a defined contribution approach.  Many faculty in the U.S. are under TIAA-CREF or some similar defined contribution program which means that they…

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Pension Promises and the UC Budget

Byuclafaculty

One of the issues facing UC is pension liabilities.  As we have noted in prior posts, although it may seem paradoxical, liability for the pension is a young person’s issue.  Old folks tend to worry about whether they will get their promised UC pension when the issue is raised.  However, the actual issue is that because they and everyone else will get what is promised, the UC budget going forward has to meet the promise in future years.  Dollars that will go to the pension won’t go to something else. Although you may read about this or that jurisdiction that…

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New LAO Report on (More) State Revenues

Byuclafaculty

The Legislative Analyst’s Office has released a commentary on the governor’s May Revise budget proposal.  It’s headline feature is that LAO expects higher revenues than the governor projects.  That extra money is not pure gravy since it interacts with the Prop 98 formulas for K-14.  Nonetheless, the report will become part of the legislative process and negotiations which will go on between the governor and legislature.  The governor wants to be cautious and his way of doing it is to tilt toward less optimistic revenue projections.  LAO has a lot of cautionary notes in its report – things that could…

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Ignorance May Be Bliss – But Ignoring Won’t Be

Byuclafaculty

This post is going to be a bit complicated.  But note that you can think of ignorance in two ways.  One is just not knowing.  The other is a state of ignoring.  So here is what the powers-that-be at UC, systemwide and campus level, should know, and what they may be ignoring.  First, by now, everyone knows UC has an unfunded pension liability.  It grows over time unless adequate contributions are put into the pension fund.  Second, UC maintains a liquid cash reserve on hand to deal with ongoing needs for payments.  It maintains the reserve both for systemwide needs…