The UC Board of Regents assembled Wednesday at UCSF to discuss a new UC retirement program proposed by UC President Janet Napolitano.
The recommendation for the new plan, approved unanimously by the committee, affects UC employees hired on or after July 1 and offers them a choice between two pension plans — both of which limit pensionable earnings. The first option is a hybrid plan that includes a pension benefit and a supplemental 401(k)-style benefit, whereas the second is a stand-alone 401(k)-style plan.
The recommendation for this revised retirement plan was proposed in light of limited UC funding, and, according to Napolitano, it will reduce university costs by $99 million per year over the next 15 years.
“These changes are reflective of the hard choices we need to make to ensure the university’s long-term financial stability and to maintain its academic excellence,” Napolitano said at the meeting.
Regents George Kieffer, Russell Gould and Monica Lozano said the plan’s financial benefits were crucial to the university’s sustainability.
Napolitano appointed a task force to develop options for new retirement plans in August. Earlier this month, Napolitano made her own proposal, which many faculty and staff members have since objected to.
Some individuals present at the meeting voiced concern over the difference in faculty and staff’s respective pension plans.
“If this plan is approved, the UC will be making a clear distinction between faculty and staff — this is a big change,” said Deidre Acker, a staff adviser to the UC regents, at the meeting.
Acker also expressed concern that the new plan would impede the university’s ability to recruit employees with specialized skills, such as nurses, administrators, Title IX directors and assistant deans.
“We are already losing highly skilled expert staff to both the private sector and private institutions, and we believe that rate will continue to increase with this plan for staff,” Acker said at the meeting.
Marcela Ramirez, student regent-designate, said that as a doctoral student, she understood both faculty and staff frustrations because a lack of a competitive retirement plan could force her — and others — to leave the university.
Nathan Brostrom, executive vice president and chief financial officer of the UC Office of the President, countered that if the university offered the same supplements to staff as faculty, it would add an additional $150 million in costs.
“There are different markets overall between faculty and staff, and that is not to say that the staff are not valued — they are,” Napolitano said at the meeting, adding that the changes reflect a need for adjustments to the UC retirement programs long-term cost structure.
Napolitano also intends to return to the regents with a proposal to keep employees’ salaries competitive across the UC system.
The board will reconvene Thursday to finalize its approval of the recommendation and will next meet May 11 and 12 in Sacramento.