uc retirement

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Regents: The Bell is Ringing – UC Needs a Pension Solution

Byuclafaculty

Yesterday, I noted that events are threatening to overtake the Regents on pension funding if they do not have a plan in place by the time the next governor takes over. Even the recent scandal in the City of Bell – vastly overpaid and corrupt city officials – is pushing the pension agenda. In today’s LA Times, Steve Lopez has a column entitled “Maybe we should thank Bell’s Rizzo for shedding light on pension excesses.” You can find it at: http://www.latimes.com/news/local/la-me-0801-lopezcolumn-20100801,0,2585758.column Here is a quote: “Both candidates for governor, Meg Whitman and Jerry Brown, have made pension reform proposals for…

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Two-Tier/Two-Part Pension Stew?

Byuclafaculty

The latest in discussion of two-tier pension plans for the state – not specifically UC – is two-tier/two-part. That is, there would be a degraded pension for new hires which would be a mix of defined-benefit and partly defined contribution, cooked into a single plan through some formula. See the report: http://calpensions.com/2010/07/31/pension-reform-brown-picks-up-where-he-left-off/ Relevant quote by an official of a group pushing pension issues:Fritz said she has been talking to a labor representative about a “hybrid” plan. Salary up to a certain level, for example $50,000 a year, could be covered by a pension. Then any part of a salary above…

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Political Deadline on UC Pension & Its Dangers

Byuclafaculty

I have been posting material related to the two gubernatorial candidates’ positions on public pensions. As noted, Brown mentions UC explicitly in his pension program – although he does not say anything in particular about it. Whitman does not explicitly reference UC. The key points to keep in mind are: 1) Unlike other public pensions, UC has the $2-for-$1 problem. In essence, 2 out of 3 dollars of employee contributions to UC’s pension fund come from non-state sources such as research grants and hospital patient revenues. If the inflow of pension money is too low, the $2 cannot be recouped…

The Meg Whitman Public Pension Proposal

Byuclafaculty

Earlier today, I posted the Jerry Brown proposal for state pensions, noting that it explicitly mentioned UC. Below are the Meg Whitman proposals from her campaign website. UC is not explicitly mentioned. However, whoever becomes governor also becomes an ex officio Regent. From the Meg Whitman campaign website Page 26 of http://www.megwhitman.com/userfiles/pdfs/policy_agenda.pdf Solve California’s Pension CrisisCalifornia currently has between $60 billion and $100 billion of unfunded state employee retirement liabilities that are owed by the taxpayers. This crisis has to be addressed to protect the retirement security of state workers and to make it possible to fix the budget mess…

Update: Brown’s Pension Program Explicitly Includes UC

Byuclafaculty

Yesterday, I posted a news item on gubernatorial candidate Jerry Brown’s proposals for state pensions. More details have now appeared on his campaign website. It is clear that UC is included, based on what appears on the website. From http://www.jerrybrown.org/pension Or pdf version:http://www.jerrybrown.org/sites/default/files/Jerry%20Brown%20for%20Governor%20Pension%20Reform.pdf Pension Reform Money needed to fund government employee pensions comes from three sources: contributions by the employees themselves, contributions by the government, and investment returns. Historically 60-75% of the funds have come from investment earnings. As Wall Street profits soared to unrealistic levels, state pension earnings grew abnormally and many California jurisdictions took advantage of what turned…

Brown details plan for California state worker pension reforms

Byuclafaculty

Note: It is unclear from this report whether Brown is confining his comments to CalPERS or whether he includes UC. Other editorial interjections in bold below. http://www.latimes.com/news/local/la-me-brown-pensions-20100723,0,7462149,print.story Brown details plan for California state worker pension reforms The Democrat would adopt some Schwarzenegger ideas, such as asking current employees to contribute more to their plans and raising the retirement age for new hires. By Michael J. Mishak, Los Angeles Times July 23, 2010 Unveiling one of his few major policy proposals Thursday, Democratic gubernatorial candidate Jerry Brown called for public-pension reform, embracing some of Republican Gov. Arnold Schwarzenegger’s ideas for curbing…

UC’s Pension at Least Gets a Mention

Byuclafaculty

UC’s pension system (and its funding problem) is often lost in articles about public pensions in California. Usually the focus at the state level is on the big CalPERS and CalSTRS funds. Or it is on particular municipal pensions such as the pension of the bankrupt city Vallejo. The calpensions.com website, in an article today, did mention UC as part of a general discussion. The full article is at:http://calpensions.com/2010/07/22/pensions-the-good-the-bad-and-california/ The UC excerpt: “The UC Retirement System ended a two-decade contribution “holiday” this year. Neither employer nor employee paid into the system, while costs were covered by investment earnings. A required…

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After the Faculty Assn. Letter to the Regents of June 2009, Where Are We?

Byuclafaculty

In a previous post, I noted a proposition that the governor promised – but that never appeared – to insure that California spent more on higher ed than on prisons. In mid-June 2009, the Faculty Association sent a letter to the Regents and President Yudof asking that the Regents treat the UC budget crisis as an emergency. It gave examples of the impact of budget cuts on campus operations and the difficulties facing UC in funding the retirement plan. The letter is reproduced below. It produced a front-page headline in the San Francisco Chronicle. The response from President Yudof and…

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Important: Effect of DC vs. DB Pensions at Universities on Retirement

Byuclafaculty

The article below indicates the problems universities have with defined contribution pension plans (such as TIAA-CREF) which provide no incentives to retire. UC’s defined benefit pension provides a strong incentive to retire for long-service employees.=======================Stanford University confronts the graying of academia By Lisa M. Krieger San Jose Mercury-Newslkrieger@mercurynews.com Posted: 07/10/2010 08:00:00 PM PDTUpdated: 07/10/2010 11:29:02 PM PDThttp://www.contracostatimes.com/news/ci_15480908?source=rss&nclick_check=1 Note: The original article includes a graphic. Click on the url above. Many workers yearn for retirement — the goodbye parties, the golf course, maybe even a gold watch. But Stanford University has the opposite problem: Nobody wants to leave. Hoping to create…

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Byuclafaculty

The Troubles at UCRP 1. Under normal circumstances, 17.02% of covered compensation (your base salary) is the annual contribution required to maintain a healthy pension fund. For all of UC, this amounts to $1.3395 billion. The Regents’ 2010-2011 proposed budget funds UCRP at just over one third this amount. Thus, the Regents’ plan will underfund UCRP by $867 million in the academic year 2010-2011. 2. Circumstances are not normal: UCRP is no longer a fully funded pension plan. Part of this problem arose because of poor market returns, but most of the shortfall can be attributed to the 20 year…