UC Office of the President fields questions on contentious retirement benefit plan

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Amid concerns from employees and faculty, the UC Office of the President fielded questions and solicited feedback Monday at a live webinar on proposed retirement benefits plans.

UC employees hired after July 1 would be subject to one of the two benefit plans working their way through the UC administrative process. The webinar, one of two planned this month, will inform UC President Janet Napolitano’s proposal on the plans to the UC Board of Regents in March.

The proposed plans, recently released by a UCOP task force, stem from a 2015 budget agreement between Napolitano and Gov. Jerry Brown. The agreement promised the university additional funding in exchange for creating new benefit plans to better ensure the UC system’s financial stability.

One of the proposed options — a “hybrid approach” — allows employees to accumulate defined benefits over the course of their careers in conjunction with supplemental funds that can be invested in retirement at employees’ own discretion. An alternative plan provides defined contributions from the university in lieu of defined benefits accumulated over time.

Both proposals have met vociferous opposition from unions that represent UC employees, which champion the current benefits system as a boon for top-tier faculty, who may otherwise choose higher pay at a competing company or university.

An online petition hosted by a number of unions representing UC employees — including the California Nurses Association and the Council of UC Faculty Associations — said the proposals would do “irreparable damage to the quality of academic services, patient care and research.”

“Hiring the very best people in any job category is absolutely critical to our vision for preserving UC’s excellence,” said James Chalfant, a member of the UCOP task force, who co-authored a review of the task force’s recommendations. “Our competitiveness is harmed by either plan.”

The proposed changes will not affect the pensions of current employees or retirees, while unionized employees will negotiate benefits through their respective union’s collective-bargaining process.

“Faculty who are opposing this are not opposing this out of some narrow self-interest,” said UC Berkeley English professor Celeste Langan. “What we’re concerned about is … the health of the UC system.”

UC spokesperson Rebecca Trounson said in an email that the university has given systemwide salary increases each year since Napolitano became president. Many employers, including competing universities, do not provide pension benefits, she added.

UCOP maintained in the webinar that one of the priorities of the plans was to promote employees’ individual investments in their retirement in conjunction with UC benefits.

“We want to emphasize this point that retirement readiness is a shared responsibility,” said Dwaine Duckett, UCOP vice president of human resources, during the webinar.

At UC campuses across the system, academic senates and faculty associations are hosting town-hall-style discussions about the proposals. Eric Hays, senior programs officer for the Council of UC Faculty Associations, said these meetings would provide a potentially more substantive discussion, involving employee concerns over potential shared governance violations.

UCOP will hear additional comments on the benefit proposals at its next webinar Feb. 10.

Contact Alex Barreira at [email protected] and follow him on Twitter at @abarreira_dc.

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  • Martha__A

    I am puzzled by the vehement opposition to changing the retirement benefits to a defined contribution plan FOR NEW HIRES AFTER JULY 1. This transition away from defined benefit plans to defined contribution plans has been happening at public institutions and all levels of government for decades. Cities have gone bankrupt due to unrealistic pensions implemented in to days of 12%+ returns on investments but unsustainable 20 years later. The federal government made the switch from DBP to a hybrid plan (401K + small DBP + Social Security) in 1987. DB pensions lock people to jobs because they don’t want to leave their pension. 401Ks are portable. The employer contributes matching funds into the 401K instead of funding the pension. The real enemies here are related to national policy: (1) salary caps on contributions to Social Security (2) attempts to destroy Social Security rather than expand it (3) caps on individual annual contributions to 401Ks, SEPs, deferred comp and Roth IRAs for ordinary people but not for highly compensated employees (4) lack of a tax advantaged federal retirement savings plan. Don’t believe the fallacy that hiring and retaining top talent (at any level) depends on a DB plan: it’s not true in private industry and increasing not true at public institutions & government. The whole compensation package is what matters: salary, benefits, job security, work environment.

  • John

    Race to the bottom. The UC is on a fast track downhill. It will be unrecognizable in about ten years.

    • If anything UC will be sunk by the fat cats of labor union bosses demanding more than they are worth. any reforms need to start with common sense renegotiations of labor contracts and playing hardball with the unions

  • still trying

    “Hiring the very best people in any job category is absolutely critical to our vision for preserving UC’s excellence,” said James Chalfant, You can’t make that assumption. After speaking with many of UC’s administrator, it is clear, higher pay does not translate to the “very best people.”