When Will UC Stop Downgrading Faculty Salaries and Benefits?

by Colleen Lye and James Vernon
Co-chairs of the UC Berkeley Faculty Association
Cross-posted from the Daily Cal
Graphic from UC Accountability Report (2013)

UC faculty need to wake up to the systematic degradation of their pay and benefits.

In 2009, when the salary furlough temporarily cut faculty salaries between 4 and 10 percent, faculty were outraged. Yet since then, our compensation has been hit by a more serious and seemingly permanent double blow.

First, despite modest salary rises of 3 and 2 percent in October 2011 and July 2013, respectively, faculty take-home pay has been effectively cut as employee contributions to pension and health care have escalated. Faculty now pay more for retirement and health care programs that offer less. Second, faculty are no longer treated equally. Different groups of faculty are increasingly pitted against each other as depending on our age, where we live or when we were hired, we receive different levels of retirement, health and other benefits.

Faculty salaries were already uncompetitive. They remain 10 to 15 percent below the university’s own comparable institutions and fell behind those of Stanford, Yale, Harvard and MIT. Unsurprisingly, Berkeley faculty salaries rank a dismal but unsurprising 28th among those offered by elite research universities.

Back in 2009, strong benefits in the form of pension and health care provisions allowed the university to excuse its uncompetitive salaries by reminding us of what it called our “total compensation package.” This is no longer true. Now, as continued austerity management grips university administrators and as campaigns are launched to divest public sector workers of their pensions and retiree health care, faculty are being stripped of these deferred (and other) benefits.

One reason faculty are largely unaware of the degradation of their benefits is that changes have been made incrementally, and they target different constituencies. Gone are the days when all faculty and retirees were treated equally and received the same benefits. And yet, for all faculty, these changes mean we are paying more and getting less.

First, faculty are divided by a new two-tier pension system. The old pension, the so-called 1976 tier, has seen a steady escalation of employee contributions from 0 percent in 2009 to 8 percent in 2014.  These raises alone mean that faculty take-home pay has deteriorated by as much as 3 percent.

The new pension introduced for those hired since 2013 has begun with a 7 percent employee contribution. Despite paying more, new faculty get less. The minimum retirement age has been raised from 50 to 55, the retirement age for maximum pension has been raised from 60 to 65, and the lump-sum cash-out and subsidized survivor benefits have been eliminated.

Second, although there is as yet no legal evidence that retiree health benefits are less “vested” (and thus unalterable except by legislation) than pensions, they have been progressively stripped. And here, again, different groups of faculty are treated differently.

Since 2010, the university’s contribution to retiree health benefits has fallen from 100 percent to 70 percent — but this pales in comparison to the changes introduced in 2013, which have affected 50 percent of faculty and staff. All new hires, together with those with fewer than five years of service or those whose age plus service is fewer than 50 years, will now receive nothing from the university toward their health care if they retire before 55. Meanwhile, contributions for those retiring after 56 will be on a sliding scale (depending on length of service), beginning at just 5 percent!

Worse still, in what is being considered a test case by the UC Board of Regents, retirees no longer living in California have been removed from university’s insurance plans. Instead, they will be given a lump sum of $3,000 per year to help defray costs not covered by Medicare. This represents a significant shift of risk and responsibility for health care from the university to retirees. If it generates the projected $700 million savings of total liability as reported by the UC Office of the President’s CFO to the regents this year, it is likely to be coming soon to a group of retirees near you.

Third, in the fall, more than 3,000 faculty and staff at UC Berkeley alone were forced to change their health care plan in a little more than two months. We were promised these had been negotiated to secure great savings for the university and lower insurance rates for all UC employees. It quickly became clear to us that those lower monthly rates masked a huge turnover in eligible providers, geographically uneven coverage of service and considerably higher deductibles. It is too soon to calculate how much more faculty are paying for their health care, but once again, we are certainly paying more for less.

Finally, at the very end of last semester, a cursory email gave us a one-month warning for major changes to the Mortgage Origination Program and Supplemental Home Loan Program, which had allowed so many faculty access to the inflated Bay Area property market by offering below-market rate or interest-only mortgages in excess of 30 years. A new program is promised but has yet to be announced. We can assume it will again ask new faculty to pay more for less.

It is time for faculty to wise up to this systematic and universal downgrading of our salaries and benefits that also sets different groups of us on different tracks. The contrast with the new contracts recently signed by California Nurses Association and UPTE (and offered to AFSCME) is worth noting. In addition to significantly improved salaries, these unions have been able to maintain a single-tier pension  (for an additional 1 percent contribution) and retain retiree health benefits without the “rule of 50” exception.

So how will faculty respond? With a sigh of resignation? Determination to get an outside offer that would increase one’s personal compensation package? Or will we seek better mechanisms that would permit faculty to negotiate all elements of our compensation rather than have it decreed — and diminished — from up high? It certainly seems unlikely that our administrators will realize that the degradation of faculty compensation will make it harder to recruit and retain the scholars who have made this the best public university in the world.