pensions

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No Way (for UC), San Jose

Byuclafaculty

As previous blog posts have noted, Governor Brown has proposed a statewide pension plan that would override the Regents’ changes to the UC pension and would require a “hybrid” plan with defined benefit and defined contribution components, a 75% cap, etc.  UC’s official position is that it shouldn’t be included.  However, the governor has not acquiesced. The legislature’s majority Democrats have been reluctant to consider the governor’s plan and have been considering alternatives.  Brown has warned public sector unions that local governments will be putting plans on the ballot and adopting pension plans that are more stringent than his proposal…

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The Odd Brown/GOP Pension Initiative

Byuclafaculty

Gov. Brown has proposed a pension revision affecting all state and local employees in California.  It would override UC’s changes in its pension system made by the Regents.  The governor’s plan is a hybrid of defined benefit and defined contribution with a pension cap of 75% of salary for new hires.  Brown wants the legislature to put his plan on the ballot but the legislature’s Democratic majority instead is studying alternatives. Legislative Republicans, however, have endorsed the governor’s plan and filed an initiative to put it on the ballot.  Unclear at this time is whether they will spend the $1-$2…

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Listen to Remaining Audio of Regents Meeting of March 29, 2012

Byuclafaculty

A previous post on this blog noted that a defective file had been received for the third day session of the Regents after the Public Comments period.  Only part of that session was posted as a result, although it did include the decision officially to withdraw implementation of an exemption from the IRS pension cap.  The complete recording has now been received.  It includes the portion previous posted plus discussion of private budgetary support and fund raising, political advocacy including a request by students to support the governor’s tax initiative scheduled for the November ballot.  There was also discussion of…

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Audios of Regents Meetings of March 27-29, 2012

Byuclafaculty

Meeting of the Regents of the University of California: March 27-29, 2012 Prior posts have included excerpts from the Regents meetings dealing with the proposed UCLA hotel/conference center and the sale by UCLA of the Hannah Carter Japanese Garden.  Below you will find complete recordings of the three days of the Regent meeting with the exception of the third day for which a defective audio file was received. Tuesday March 27, 2012: Day 1 3:00 pm Committee on Health Services (includes public comment) Wednesday, March 28, 2012: Day 2 8:30 am Committee of the Whole (public comment) Includes comments on…

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Another Hybrid Pension Proposal

Byuclafaculty

A state legislative committee is looking at a hybrid pension plan for (newly hired) public workers in California but it differs from the hybrid proposed by Gov. Brown.  The Brown plan was a mix of a (reduced) defined-benefit plan and a defined-contribution plan.  The alternative being considered is a mix of a (reduced) defined-benefit plan and a “cash balance” plan. A cash balance plan is similar to defined contribution but it guarantees a fixed rate of return.  That means, the employer and/or employee must adequately fund the plan so it meets the guarantee.  The higher the guaranteed return, the greater…

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Chancellor at Staff Town Hall on Hotel, Climate Survey, Pensions, Donor-Community Relations

Byuclafaculty

Chancellor Block, Vice Chancellor Steve Olson, and Assistant Vice Chancellor for Campus Human Resources Lubbe Levin participated in a staff Town Hall on April 4. The session was videoed but the video works poorly and the commercial service utilized includes ads.  Below is a link to the audio of the session which works much better. There were no exhibits at the session so nothing is lost in the audio-only format. There were specific questions, some in-person/some submitted in advance, on the proposed hotel/conference center, the upcoming (systemwide) campus climate survey, pensions, and donor-community relations.  Links just to those questions are…

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What Not to Think (on pension bonds)

Byuclafaculty

You may have seen the headline on the front page of yesterday’s LA Times business section about pension bonds. And you may know that the Regents have approved possibly issuing such bonds. (None have been issued, however, and any borrowing to put into the UC pension has been done internally, not by issuing external bonds.) The LA Times article describes what some municipalities have done in the past to deal with unfunded pension liabilities or just to make a speculative profit. Essentially, they have issued bonds and used the proceeds to make pension investments.  If the interest cost of the…

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Pension Cap at Regents

Byuclafaculty

Those who follow this blog will know that a brouhaha developed when certain highly compensated administrators in the UC system pushed for a lifting of a cap on the level of pay considered for pension calculations under IRS rules. In 1999, the Regents applied for an exemption that would have lifted the cap.  It was approved by IRS in 2007.  But the Regents never implemented the exemption, have indicated they will not do so, and are now threatened with litigation. Apparently as a result, the Regents have a recommendation on their upcoming agenda to rescind their 1999 action.  The item…

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Will There Be a Pension Lawsuit Over the Cap for the Highly Paid?

Byuclafaculty

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…

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On Our Level

Byuclafaculty

CalPERS’ governing board voted to cut its earnings forecast to 7.5%, the same level assumed in UCRP. There were earlier reports, as readers of this blog will know, that CalPERS would cut below us to 7.25%. If CalPERS had dropped below UCRP, the Regents might well have reduced their forecast. As noted in earlier posts, changing the earnings forecast does not change the future actual earnings.  The future will be what it will be. But lowering the forecast increases the estimated unfunded liability and could thus trigger higher contributions or some other adjustment. We will see at the upcoming Regents…