Phoenix Delman/Staff

Everyone should be able to retire with dignity with a pension after a lifetime of work. Productivity has increased dramatically over the last 30 years, but most of this increased income has gone to the top 1 percent of earners. At the same time, these earners in the top 1 percent have made the decisions that have taken away pensions, so most will be forced to try to work into their 70s. 401k plans have not made up the difference, as 57 percent of Americans have less than $25,000 in their 401k plans and other savings. Many will be laid off at an earlier age and be forced to live in poverty or move in with their adult children. What happened? The top 1 percent have underfunded pensions, then claimed they are too expensive and discontinued them. IBM underfunded its employees’ pensions, then converted them to 401k plans, resulting in the loss of hundreds of thousands of dollars each for many IBM employees. United Airlines went bankrupt in order to stop paying its pensions, ruining the lives of many former employees. Is the UC system following this example?

From 1990 to 2010, no taxpayer money or student fees went into the UC pension system. UC employees were assured that the pension was so overfunded that the regents actually took money out in 1991 to 1993 and even 2002 to 2003. By 2006, the regents claimed that contributions were needed again but refused to allow an actuary hired by the unions to verify this. It took five years of litigation for the UC system to allow a union-hired actuary to even get the data. What was UC system trying to hide? The union-hired actuary found a potential $1 billion in savings. Meanwhile, the state got used to not funding UC pensions despite funding CSU pensions at 20 percent of salary — compared to a 5 percent employee contribution. Has UC management displayed competence and transparency in allowing this to happen?

Who gets hurt by these changes? In the case of the UC system, executives like President Mark Yudof come out unscathed. He’ll receive an additional $230,000 per year after his five years of service. But UC workers pay more for fewer benefits. For younger workers, the system has drastically changed the rules on qualifications for retiree health care benefits. As of July 1, one’s age and years of service must equal 50 — and one must be vested — in order to avoid cuts to health care benefits in retirement. These cuts could equal one-third of one’s retirement income. For faculty and staff members hired on or after July 1, the UC system has a new retirement tier in which employees must pay a little less and get a lot less, about one-third of what some co-workers will get and about half of what others will get.

Two unions, UPTE-CWA 9119 and California Nurses Association, oppose the tiered retiree benefits and are in bargaining over these and other matters. The UC system refuses to consider any proposals from the unions.

Before the contribution holiday, the sysetm had contributed two, three and five times as much as employees contributed to the fund. The retirement benefits helped retain faculty and staff members. Now, with two tiers of retirement, why would newly hired employees spend lifetimes at the UC system for meager pensions? And if these tens of thousands of employees do not stay, how does the fund stay solvent?

The UC Regents now want UC employees to pay more and get less, an experience familiar to UC students. It’s really up to us to say no to these ongoing shifts of resources from students and workers to, yes, executives, Regents with connections to development and finance, CEOs, consultants …

Turning the tide means working together to challenge decisions and priorities that diminish our future and the future of the university and working together to preserve (and, where needed, reintroduce) decent pensions for all.

No to exorbitant UC executive pensions; yes to decent pensions for UC faculty and staff members.

Paul Brooks is an elected staff representative on UC Retirement Advisory Board. Tanya Smith is president of the Local 1 of UPTE-CWA 9119.

Contact the opinion desk at opinion@dailycal.org.

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Martha Olney/Courtesy

UC Berkeley economics professor Martha Olney and her wife have been together for 30 years. They were married in 1992 at a religious ceremony and had a legal wedding in 2008.

But during those years, Olney has been unable to extend her UC health benefits to her wife, Esther Hargis, a retired reverend, without paying taxes on the cost of those benefits. The couple also could not pay taxes without facing the logistical and financial issues of filing separately.

Now, following the U.S. Supreme Court’s rejection of the Defense of Marriage Act and Proposition 8 in June, the university is beginning to implement changes, including programming changes to its payroll and human resources systems that will benefit UC employees and retirees in same-sex marriages.

Previously, Olney and other UC employees in same-sex domestic partnerships were forced to pay federal imputed income taxes for health benefits given to their partners through UC health care plans. In addition, Olney said she faced a government penalty if she let her wife, who is over the age of 65 and eligible for Medicare, use UC health benefits.

Filing tax returns was also much more difficult for domestic partners. Olney reported that she and her wife had to file separate returns for their own incomes and then combine the two into a joint return, forcing them to file nearly three times as much paperwork as a heterosexual couple would have to.

“Our taxes will now be immeasurably easier to complete,” Olney said in an email. “A weekend rather than a full spring break of effort.”

The university will save money as a result of the new benefits system. Previously, it had to pay taxes on 50 percent of employees’ imputed income under the Federal Insurance Contributions Act. Dianne Klein, a UC spokesperson, said that about 2,700 UC employees paid taxes on imputed income last year.

A percentage of those people have same-sex spouses, Klein said, and will no longer have to pay taxes on imputed income once they are moved over to the plan for married couples. The system should be able to accommodate married same-sex couples by mid-September — a delay that has frustrated some employees, including Olney, who said that UC forms had not been updated quickly enough to reflect the rulings.

“I don’t think it’s deliberately discriminatory, but I do think it’s annoying and unnecessary, and there’s no good excuse for it,” she said.

Olney emphasizes the importance of being “just as legally married as any other person on the street” over the benefit of having to spend less time and money on taxes.

“There is the intangible: We are now simply ‘married,’” Olney said. “No asterisk. No caveat. No ‘same-sex’ adjective. Just married. We hold hands in public more, something we used to reserve for Provincetown, the Castro and Gay Pride.”

Most significant, she said, is the newfound equality for a younger generation that will not experience the same tax and benefit conundra that she and her wife have faced.

“A 9-year-old boy who’s realizing he’s gay doesn’t have to have this (realization), ‘Oh, I’ll never be able to get married, and I’ll never have kids,’” Olney said. “Instead, it’s ‘Oh, when I get married, it’ll be two guys instead of a guy and a gal.’”

Contact Simon Greenhill at sgreenhill@dailycal.org and follow him on Twitter @simondgreenhill.

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The total UC payroll of roughly $10.6 billion in 2011 grew to $11.2 billion in 2012. The highest source of funding for pay came from medical enterprises, such as teaching hospitals — which became the single highest source of funding at $2.8 billion — and the Medical Compensation Plan.

“The biggest jump was from medical enterprises,” said UC spokesperson Dianne Klein. “They were generating more money.”

Funding from the federal government and from general funds and educational fees dropped from 2011 by nearly $28 million and nearly $40 million, respectively. Funding from private gifts, grants and contracts increased by more than $24 million to $636 million during the same period.

According to a UC press release, the 10 highest-paid UC employees in 2012 were “health sciences faculty members (typically world-renowned specialists in their fields who are paid predominantly from their clinical practices) and athletic coaches (paid from non-state funds).”

Lecturers, other teaching faculty and clinical professors represented the highest percentage of academic personnel payroll, while those in the health care and allied sciences group were the highest percentage of staff payroll. There were no general merit increases for employees not represented by unions in 2012.

“UC salaries are below market,” Klein said. “That does make it hard to attract top talent.”

Klein cited several alternatives to compensation as incentives for working for the UC system, such as the university’s public service mission.

The report attributed the increase in payroll to “a combination of factors, including increased research activity and market pressures for more competitive compensation, particularly in the areas of health care, instruction and research.”

UC Academic Senate Chair Robert Powell stated that the decrease in public funding has made some people feel that the UC system is becoming less and less like a public university.

“We want UC to be for California,” Powell said. “Many of us regret that we have to take more out-of-state students and cut faculty and services. If state funding is there, we won’t have to do these things.”

The highest-paid UC employee in 2012 was former UCLA basketball coach Ben Howland, who earned roughly $2.2 million in gross pay.

Contact Sohan Shah at sshah@dailycal.org.

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Jacob Brown/Staff

The University of California released its annual report on systemwide employee compensation for the 2012 calendar year today.

The 2012 gross salaries of more than 191,000 career faculty and staff employees, as well as part-time, temporary and student employees, are disclosed in a searchable database on the UC website.

The database includes big-name UC figures like:

• UC President Mark Yudof: $600,599.00
• Former UC Berkeley chancellor Robert Birgeneau: $445,716.00
• UC Berkeley professor Alexei Filippenko: $247,676.20
• UC Berkeley professor and former U.S. Secretary of Labor Robert Reich: $246,199.84
• UC Berkeley professor Ananya Roy: $147,161.15
• UC Berkeley law professor John Yoo: $329,451.07
• Former Cal Football coach Jeff Tedford: $2,146,581.24
• UCLA visiting professor James Franco: $12,249.84

Shirin Ghaffary is the executive news editor. Contact her at sghaffary@dailycal.org.

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Virtually no one thinks “public servants” should be receiving taxpayer-subsidized payouts as large as $300,000 per year for life when they are no longer working. That’s because the money must be diverted from critical health and welfare programs, classrooms and public hospitals.

This is why — in the wake of deep cuts to schools and other public services — Gov. Jerry Brown and the California Legislature enacted the Public Employees Pension Reform Act of 2013. The centerpiece of that legislation was a cap on pensionable compensation for the highest-paid state workers. The current cap applies to new hires making more than $113,700 per year.

At the University of California, where skyrocketing tuition and dangerously understaffed hospitals have become the new norm, state pension reform doesn’t apply.

According to the AP, as of May 2012, there were 2,129 UC retirees drawing annual pensions of more than $100,000 — 57 exceeding $200,000 and three with pensions greater than $300,000. Many more will soon follow. Approximately 22,000 of the system’s nearly 200,000 employees receive salaries in excess of the new state pension cap. In 2011, almost 7,000 UC employees received bigger paychecks than Brown, and almost 600 received bigger paychecks than President Barack Obama.

To be clear, state pension reform would demand more of every UC employee. But the cap on pensions for the system’s highest-paid employees alone could eventually save as much as $130 million per year.

Let’s put that in perspective.

California just approved a historic tax increase to support the UC system, preventing a $125 million cut in state funding during fiscal year 2013-14.  Over time, the state pension cap would enable the UC system to save more than that every year in perpetuity.

It’s important to remember that the university is facing a pension crisis of its own making. For 20 years, administrators failed to make the required employer contributions to the UC retirement system — even as they dramatically increased the number of executives who will be draining the system in the coming decades.  In UC hospitals alone, annual management payroll has grown by more than $100 million since 2008.

So with all these golden handshake commitments, how is the university balancing its books?

First, it is demanding that its lowest-wage workers — including custodians and food service workers who make so little that they qualify for public assistance programs — contribute more and work longer in order to qualify for retirement benefits.

Second, it is asking students to pay more. In-state tuition and fees have tripled since 2002. Faculty hires have been deferred. Thousands of frontline campus and hospital workers have lost their jobs.

Third, it is shortchanging its patients and cutting corners on care. In fact, as more patients enter the UC health system, the providers they are entrusting with their lives are being asked to do more with less if they are lucky — and being laid off if they are not.

Patients are paying an especially heavy price. Just last month, a man admitted with a severe head injury at the UCSD medical center walked out of the hospital in his gown, only to be found dead in a canyon four days later. Sadly, UCSD has been trying to save money by monitoring such patients on video instead of having adequate numbers of around the clock, in-room nursing staff members to protect those who might be a danger to themselves or others.

This last incident prompted AFSCME to call the university back to the bargaining table. We offered a compromise that included a higher retirement age and higher pension contributions in exchange for safe staffing measures that could help prevent the next tragedy.  UC refused, doubling down on the insistence that golden handshakes for its growing legions of executives are more important than the safety of our patients, basic fairness to frontline workers or more access for the historic number of California students who are qualified to enroll in the UC system.

Such tone deafness is the single greatest threat to the UC system today.

That’s why we are now joining with a bippartisan group of state legislators in supporting State Constitutional Amendment 15, authored by Sen. Leland Yee. This common sense measure would finally apply state pension reform to the UC system.

By reigning in the most outrageous public pensions in California, SCA 15 would restore the trust of California taxpayers and bring fairness to UC workers, students and patients. It would put the university’s retirement system back on a financially sustainable path. And most importantly, it would end the absurd practice of diverting the UC system’s vital academic and health delivery resources into the already overstuffed pockets of its executives.

Kathryn Lybarger is the President of AFSCME Local 3299, which represents more than 22,000 Patient Care Technical Workers and Service Workers at the University of California’s 10 campuses and five medical centers. Read their UC Patient Care Whistleblower Report at www.afscme3299.org/putpatientsfirst.

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Of historical value we find it interesting to note that our beloved Alma Mater appears to have evolved from a bastion of innovative thought and free speech to a seemingly spineless institutution begging for funds, selling out entire departments to the likes of Novartis and beyond our wildest imagination taking on the former head of homeland security as President of the once grand and glorious University of California.

We hope beyond hope for better times.

— Jeff Corbett,

UC Berkeley 1983 alumnus

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I remember that when the small federal budget reduction was implemented, Janet Napolitano held airline passengers hostage by deliberately reducing the number of TSA security personnel in airports to create an artificial logjam to avoid implementing the budget cut in her department. As a cabinet member, she was obviously only interested in building her own power and grabbing the most gain for herself — she was not a team player, and she did not have the welfare of the public, whom she should have served, in mind. Now I am afraid that she will again try to grab the most gain for herself in her position of UC president and will not have the welfare of UC student and faculty communities, which she should serve, in mind and will look after for herself only. We need to question her on her motivations in coming to the UC system (because she has no education administration background at all), her visions of the UC system’s future and her various interim goals of accomplishment over her tenure at UC in order to fully understand whether she is truly fit to lead the UC system. The university has suffered over the last few years from poor leadership. This system is too important an institution to be entrusted to a self-serving politician now.

— Thomas Yang,

California resident

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Last month, Yudof approved the UCLA Anderson School of Management’s proposal to be primarily covered by student tuition. This is the sixth program at the Anderson School that has become self-supporting.
Yudof’s decision came with a number of conditions, including that the program cannot use state funds or tuition from students in other programs and that financial aid should continue to be provided to eligible students. Yudof also said the Anderson School and the degree programs it contains should retain the characteristics of the “great public research university” that is the University of California.
But this decision raises a few alarming concerns that puts the public mission the UC system was founded upon to the test.

The state currently provides for less than 21 percent of the entire Anderson School budget, according to the school’s website. For every $1 in graduate research funding provided by the state, the UC secures $7 more in federal and private dollars, according to a June UC press release. This is representative of a wider trend in which more and more UC graduate schools are finding alternative ways to fund themselves.
If UC graduate schools continue having to become self-funded or privately funded, there will be a higher incentive to break off and seek increased independence from the UC system in nonfinancial ways as well. One example of this was UC San Francisco Chancellor Susan Desmond-Hellmann’s January 2012 proposal to allow the campus higher financial and governing autonomy from the university following similar efforts from other UC professional schools. Her proposal was approved in the form of a UCSF advisory board, which granted Desmond-Hellmann more autonomy over the campus.

In becoming self-supporting, the Anderson School administration should ensure current tuition levels remain the same. The administration has promised that tuition levels will stay at current levels for the coming school year, but what’s to say it won’t increase further down the line? Even if the state is providing no money to students, the school has a responsibility to students to keep tuition as low as possible.
Making the Anderson School self-sufficient is revealing of a larger net the university has been snagged in. Though state lawmakers continue to tout the California Master Plan as the backbone of California, state funding to the UC and CSU systems has drastically decreased in recent years. The master plan is a beautiful ideal, but the state needs to recognize the funding necessary for that ideal when putting together the budget each year.

Without more stipulations and criteria for future programs aiming to be self-sufficient, we’re on a crash course to becoming a fully privatized university.

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Because the Supreme Court did not issue an overarching mandate regarding the use of race in admissions policies, it is the duty of public universities to ensure representation of all races in their schools. This is currently done with varying success and through a variety of methods at public universities around the country. In addition to considering applicants’ race, Texas follows the Top 10 Percent Plan, which guarantees high school students who are in the top 10 percent of their high school graduating class automatic admission to any public university in Texas. The University of California has a similar plan, with high school graduates in the top 9 percent of their class guaranteed admission to at least one campus in the University of California.

However, California’s version is race-blind because of Proposition 209, a 1996 ballot initiative that prevents state-funded institutions from considering factors such as race or ethnicity in admissions or hiring decisions. Because of Prop. 209, individual campuses within the University of California have seen a decrease in admission and enrollment of hispanics and black students since the late 1990s. In 2011, an estimated 11 percent of the student population was Chicano/Latino at UC Berkeley, while an estimated 49 percent of the state’s college-aged population was Hispanic. It is important that public universities ensure that their student bodies reflect the racial makeup of the state in which they exist. California’s current methods do not allow for such a student body.

By not forcing the University of Texas to change its admission policies, the Supreme Court rightfully allowed the University of Texas at Austin to maintain diversity in higher education. Other states should also have that opportunity.

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The University of California filed a lawsuit against Bank of America, Barclays and 20 other global financial institutions on Tuesday, alleging the university suffered financial damages when the banks manipulated an interest rate benchmark, known as the London Interbank Offered Rate, or Libor, that affects trillions of dollars of investments worldwide.

The 236-page lawsuit charges the banks with fraud, deceit and violating antitrust laws, all of which were allegedly part of a conspiracy to lower the Libor. Although the scale and scope of the damages to the university’s $80 billion portfolio of investments have yet to be determined, UC spokesperson Brooke Converse said the university’s retirement pool was negatively affected by the manipulation of rates.

“We have a pretty strong case in terms of the evidence that’s out there, and we have a responsibility given that we incurred losses to our investment pool,” Converse said. “We have a duty to recover those losses.”

Libor determines the benchmark rate at which many of the world’s largest banks are able to borrow money by surveying representatives from 18 major global banks. The rate impacts short-term interest rates for a wide variety of financial instruments and investments, some of which the UC system invests in. The lawsuit claims the defendants colluded to artificially suppress Libor for the benefit of individual traders.

Bank of America, listed first in the university’s lawsuit, declined to comment on the case. UBS, Barclays and The Royal Bank of Scotland, each indicted in the suit, were fined a total of about $2.5 billion in the past year for manipulating Libor and similar benchmarks.

The law firm Cotchett, Pitre & McCarthy is representing the university and several other California civic bodies, including San Diego County, the city of Richmond and the East Bay Municipal Utility District, in similar lawsuits against the banks. Some banks are also facing an array of class action lawsuits from groups around the country.

Nanci Nishimura, an attorney with the firm, said although the wide scope of the Libor scandal is difficult to understand, everyone, from homeowners to students, is affected through the interest rates on student loans, mortgages and credit card payments.

“People need to know they’re being taken advantage of,” Nishimura said. “This is in the paper almost every day, and people think it isn’t sexy — but it’s affecting us every single day.”

But the university’s suit, filed in the U.S. District Court in San Francisco, may not even be heard. In March, most of the claims in a similar suit filed in the Manhattan District Court were dismissed.

Even if the complaint is thrown out, however, Nishimura says filing the university’s case has the potential to shed light on abuses in the financial sector.

“Even if this complaint were thrown out on a technicality, even if not all the claims survive,” Nishimura said, “there have been wrongs, and we’ve got to get justice.”

Contact Chris Yoder at cyoder@dailycal.org and follow him on Twitter @christiancyoder.

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