UC raises retirement plan contributions

The University of California and its faculty and staff will be contributing more to the university’s underfunded pension plan beginning July 1.

The UC Board of Regents approved the increases — which will see most faculty and staff paying 3.5 percent of their total compensation while the university will pay 7 percent of employees’ salaries — at a meeting last fall. Currently, most employees pay 2 percent of their total pay while the university pays 4 percent to the UC Retirement Plan. The rates are set to increase again in July 2012, with employees paying 5 percent and the UC paying 10 percent.

UC President Mark Yudof chose to recommend a second tier to the plan — in which contributions for employees hired on or after July 1, 2013 will rise to 7 percent of their total compensation while the university will pay 8.1 percent.

Under this tier of the plan, employees hired after July 2013 will have their minimum retirement age increased by five years to 55 and will no longer have the option of a lump sum cash-out.

The university’s decision was met with strong contention from UC employees and their advocates, who have stated that the plan could leave lower-income UC employees struggling to stay out of poverty.

Until April 2010, the UC and its employees had not contributed to the fund for nearly 20 years, mainly due to the fact that it had maintained a surplus. However, the board voted to reinstate the contributions in February 2009 as a way to combat its deficit.

According to a university statement, the board has taken a number of actions to address the shortfall in the past year, including the establishment of a new tier of benefits for employees hired beginning July 1, 2013, and the approval of internal borrowing options to better fund the pension plan.

“Until UC and its employees together begin contributing enough to cover the annual increase in cost for active members (in excess of 17% of pay), the pension program’s  current $14 billion unfunded liability will grow, adding to the pressures on UC’s operating budget,” the statement reads.

Allie Bidwell is the news editor.

A previous version of this article incorrectly stated that UC President Mark Yudof recommended a dissenting plan for retirement plan contributions. In fact, he recommended a second tier of contribution increases that was adopted by the UC Board of Regents.

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  • Anonymous

    The University of California Berkeley deficit continues to grow. Students and their parents have pitched in to close the deficit with higher tuition. Now it is the turn of the faculty, vice chancellors, chancellors and UCOP to pitch in. Here are wage concessions for Cal Chancellor Birgeneau and  University of California President Yudof  and the Academic Senate.

    Californians face foreclosure, unemployment, depressed
    wages, loss of medical, unemployment benefits, higher taxes: UC Board of
    Regents Regent Lansing, President Yudof demonstrated leadership by curbing wages,
    benefits. As a Californian, I don’t care what others earn at private, public universities.
    If wages better elsewhere, chancellors, vice chancellors, tenured, non tenured
    faculty, UCOP should apply for the positions. If wages commit employees to UC,
    leave for better paying position. The sky above UC will not fall.   

    California suffers from the
    greatest deficit modern times. UC wages, benefits must reflect California’s ability to
    pay, not what others paid elsewhere. Campus chancellors, vice chancellors,
    tenured & non-tenured faculty, UCOP are replaceable by the more talented.

    UC faculty, chancellor vice chancellor concessions:

    No furloughs   

    18 percent reduction in UCOP salaries & $50
    million cut.

    18 percent prune of campus chancellors’, vice chancellors’ salaries.

    15 percent trim of tenured faculty salaries, increased teaching load

    10 percent decrease in non-tenured faculty salaries, as well as increase research,
    teaching load

    elimination of all Academic Senate, Academic Council costs, wages.


    bushes bloom after pruning.


    UC Board of Regents Sherry Lansing, President Yudof can bridge
    the public trust gap by offering reassurances that UC salaries reflect depressed
    wages in California.
    The sky will not fall on UC


    Californians are reasonable people. Levy no new taxes until
    an approved balanced budget: let the Governor/Legislature lead – make the
    tough-minded (not cold hearted) decisions of elected leadership. Afterwards
    come to public for continuing, specified


    you for advocating for all Californians, University of California

  • Anonymous

    This article is incomprehensible.  “Though UC President Mark Yudof chose to recommend a dissenting plan — in
    which employees’ contributions would have risen to 7 percent of their
    total compensation while the university would have paid 8.1 percent —
    the board voted in December to move forward with original plans for the
    increased rates.”  “The university’s decision was met with strong contention from UC employees”  “The increased contribution rates expire in July 2013, when university officials plan on implementing a new pension model.”

    Mostly, this is just bad bad writing.  It is impossible to understand what this means.  Probably, the author has no understanding of what is going on.

    • Anonymous

      Here maybe this will help you out. 
       Like the article says “The UC Board of Regents approved increases” so UC employees are currently paying 2 percent of their retirement plan, ok so they are raising it form 2% to 3.5. Then on top of that it will go up again in July to 5% so its up again. So the University and its employees are taking on more of the economical burden of the pension plan. 
          Then they are also going to raise the retirement age as stated in paragraph 4 to 55 years of age for employees hired after July 2013. So there will be 5 extra years of a 5% contribution to their retirement fund, to help combat the deficit.  
         Employees of the UC system don’t like this because , as it states in paragraph 5, it puts strain on those who are already struggling to make ends meet as it is. 
        This is planned as a short term fix until july 2013 when University officials plan to implement new pension plans. 
      Now I mean thats what I got at least. What sucks about this is the hardship it is putting on to the already strained operating  budget of the UC system as well as the economic strain placed on those who keep the UCs running. 

      • Anonymous

        they edited the article after I pointed out it was illiterate

      • Anonymous


    • Anonymous

      It very clearly states that the contribution percentage of both the UC and its employees will undergo 2 increases. Currently they pay 2% for UC employees and 4% from the university. This increase will go up to 5% for employees and 10% for the University not the numbers you misquoted in your comment. While this quick fix is set to expire in 2013 there is a plan undergoing review for retirement ages of employees hired after july 2013 to work 5 years extra. 
        The employees of the University are disillusioned with this, as paragraph 5 states, it could leave those in lower income positions who are struggling to stay out of poverty in a worse situation. Demanding that employees pay more for their pension takes money away from paychecks thus decreasing the average “take home”, which for those who are already in financial hardship could potentially be the straw that breaks the camels back. This is why university employees don’t like this. This article is bringing your attention to the why they are upset and what is going on in the arena of UC employee pension plans.