uc retirement

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Reflections on Two-Tier Pay Plans

Byuclafaculty

The recent majority report of the UC Post-Employment Benefits Task Force (PEB) proposes a two-tier retirement plan and makes long-term projections about the financial implication for the pension plan. (See the earlier post for the majority and minority PEB reports.) Keep in mind that two-tier pay plans have a history of instability. Such plans were introduced in the 1980s when various unions signed concessionary contracts during that era. New hires who were under such contracts were offered lesser pay and benefits than incumbents. However, pressures soon began to arise to remove the perceived inequity as the new hires become a…

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Post-Employment Benefits Task Force Report Now Available Including Academic Senate Dissent

Byuclafaculty

The long-awaited (long delayed?) Post-Employment Benefits Task Force report is now available. (See the earlier posting of a letter from President Yudof anticipating the report’s release.) The report – which is advisory to the president and regents – includes two-tier retirement options for new hires. There is also a “choice” option for current employees to enter the lower-tier (which raises some legal issues). A dissenting report by Academic Senate representatives is also included in the posting. All material can be found at http://www.universityofcalifornia.edu/news/ucrpfuture/emp_task.html

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Letter from President Yudof regarding proposed changes to UC retirement benefits

Byuclafaculty

The following letter about the impending recommendations of the Post-Employment Benefits Task Force was emailed today. It is reproduced below for anyone who may not have received the email and to provide a continuing source of the text. Some parts have been put in bold in the reproduction below.=================== UCOP NewsSent: Thursday, August 26, 2010 11:23 AM To: UCOP-L@LISTSERV.UCOP.EDU Subject: A letter from President Yudof regarding proposed changes to UC retirement benefits Importance: High MEMBERS, UNIVERSITY OF CALIFORNIA COMMUNITY Dear Colleagues: I am writing to let you know that within the next few days, the Task Force on Post-Employment Benefits…

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Robbed Blind: Governor is Heating Up Verbal Campaign on Public Pensions

Byuclafaculty

The rhetoric around public pensions in California is heating up, as the excerpt below from a longer piece at http://blogs.kqed.org/capitalnotes/2010/08/24/budget-55-robbed-blind/#more-6347 suggests. As indicated in my previous posts on this issue, all of this rhetoric on pensions points to the need for a Regental plan for UCRS to be in place before the next governor takes over. But, of course, it matters what this plan will be. Note that the 1999 law which the governor decries below did not deal with UC’s pension. So we are potentially being pulled into a CalPERS issue. —————- Budget +55: “Robbed Blind” August 24, 2010,…

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Two Prominent Dems Join With Governor on Public Pensions

Byuclafaculty

From http://www.capitolweekly.net/article.php?xid=z2hom7ay9rt20f# The call for pension reform received an unexpected boost from an unlikely source this week — former Gov. Gray Davis. In an interview with Reuters, Davis said reforms advocated by Gov. Arnold Schwarzenegger will make it easier for whomever holds the job next, and he praised Schwarzenegger for pushing for changes in the state pension system — changes that Davis said were now inevitable. “With … the open primary and redistricting reform, at least 20% of the Legislature will have its interests properly aligned, and they will be punished [by voters] if they don’t solve big problems,” he…

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Likely Death of Public Pension Anti-Spiking Bill Will Keep Issue Alive When New Governor Arrives

Byuclafaculty

From the LA Times today at http://www.latimes.com/news/local/la-me-0818-pension-reform-20100818,0,3115924,print.story comes the word that a pension “spiking” reform bill has been watered down. The governor says he won’t sign it. Such a bill might have defused some of the tension and controversy around the public pension area – which could easily lead to a ballot initiative that would encompass UC’s pension. This development underlines the need – emphasized in prior posts – for the Regents to have a plan for UC in place by January. Note: “Spiking” refers to an ability by employees to inflate final earnings for the pension calculation by adding…

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Sweeping Pension Changes by New Governor Could Cover UC if Regents Don’t Act

Byuclafaculty

While the article below refers only to CalPERS and CalSTRS, as has been noted in prior posts, UC is in danger of having its pension system covered by some sweeping initiative that would cover all public pensions in California. A new governor takes office in early January 2011. Unless UC has a plan of its own – and unless the Regents push for UC autonomy as other statewide policies are debated – the consequences could be unfortunate. Note part in bold italics below. — Pension reform: Brown picks up where he left off (excerpts) By Ed Mendel calpensions.com 7/31/10 In…

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NY Times Debate on Aging Professoriate

Byuclafaculty

The New York Times website today features a debate among various academics about the problem (some don’t think it is one) of professors who don’t retire. One participant calls for reinstatement of mandatory retirement. (Mandatory retirement for faculty was ended under federal law in the 1980s.) None of the participants notes that under a defined-benefit (DB) pension, such as we have at UC, there is a strong incentive to retire. Long-service employees under DB pensions lose one year of pension for each year they don’t retire. You can end up working for nothing if you stay. Universities that have defined-contribution…

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What Retirees Are Being Told by UCOP About Possible Changes in Retiree Health Care and Pensions

Byuclafaculty

Judgment Day is Coming from the Post-Employment Benefits Task Force According to the “New Dimensions” Benefits Newsletter for UC Retirees, July 2010, published by UC Human Resources at UCOP. Below is the relevant article: Post-Employment Benefits Task Force to Send Recommendations to President Yudof Predictable but reduced UC contributions for retiree health premiums and changes in eligibility for retiree health benefits for many future UC retirees are among the options the Post Employment Benefits Task Force is considering sending to UC President Mark G. Yudof. After more than a year of study, discussion and wide consultation, the task force is…

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Cash Balance Pension? New Ham & Eggs for UC?

Byuclafaculty

There are folks out there who are convinced they have the solution for public pension plans in California and maybe the universe. They are pushing something called cash balance (CB) plans. These are in contrast to defined benefit (DB) plans, such as the UC basic pension, and defined contribution (DC) plans (which UC had until recently as a supplement). So let’s start with definitions. A DC plan means the employer puts in a particular contribution, say, a percent of pay each period. (There may be employee contributions, too, also defined. The UC version of DC had only employee contributions.) The…