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Monday, October 11, 2010

Monday, October 11, 2010

Pension Decision May Be At Hand

Gov. Schwarzenegger tried and failed to covert California public pensions to 401(k)s with a special election in 2005. This year, he used the budget negotiations to force permanent reductions in the pension formula for state workers. This was a major reason for the furloughs and IOUs and uncertainty and the rest of it.  According to the California Report Sunday broadcast, this was done before the future savings for the new forumulae were quantified.  A cynic would say the Gov and his legislative allies held the state hostage so he could cut public pensions in the midst of the great recession. 

The University of California Post- Employment Benefits Task Force has also proposed significant reductions in the UC Retirement Program.  Comment on their two options, Options A & B, has been quite negative, and another major faculty critique is due out this week. 

According to a report cited below,  President Yudof now plans to end the comment period on October 14th, and that the Regents will vote on permanent changes to UCRP in a special meeting in December.  I hope this is wrong: detailed analyses are just starting to come in (see below), the Academic Senate has not yet taken any position, and a rush to dilute one of the central propellants of the University of California's rise over the past forty years makes no institutional sense.

We cite beneath the break an employee coalition's "Statement of Principles" and then provide additional links to presentations and commentaries for those wanting to catch up with the enormous changes being prepared over the summer.

Dear Senate Faculty Member,
Several unions (AFT, AFSCME, UPTE, CNA) in consultation with CUCFA and members of the senate faculty welfare committees have put together a joint set of principles regarding possible pension changes, and we would like to have your name on the letter that has to go to UCOP by OCT 12th. While it would be best to have full senate committees sign on to the letter, we simply do not have the time to go through the normal voting process.   At a meeting with UCOP on Oct. 7th, we were informed that President Yudof wants to receive all input by Oct. 14th so he can make a recommendation to the Regents at the November 17-18th meeting. We also expect that a final decision will be made at a special regents meeting in December.  This is all moving very fast, and while the dissenting Post Employment Task Force Report does call into question the consideration of a new pension tier, we feel that President Yudof may move ahead and support one of the task force's options, which do not make UCRP more healthy and offer reduced benefits for new hires and possibly current employees.  Please let me know if I can sign your name to this letter as a concerned faculty member.

Bob Samuels, President, UC-AFT

Here are the shared principles:

1. We need to move to a full funding of the normal cost of UCRP.  The suggested new tiers do not address this issue.

2. There has to be a credible plan for total remuneration approved by the regents.

3. We must begin paying down the UCRP liability now.  This can be done in part from borrowing from STIP or Pension Obligation Bonds.

4.We need more people paying more into UCRP and not fewer people paying less.

5. There should be a full discussion of alternative plans with the inclusion of faculty, unions, and staff at all levels of the process.

6. We need a plan to pre-fund retiree healthcare.

7. We will work together to get the state to pay its share of the employer contributions.

8. The university should end supplemental retirement packages for Senior Managers.

9. Any changes to the pension plan and retiree health should not discriminate against low- and medium-wage employees.

10. We oppose raising the employee contributions to a high level in order to induce current employees to opt into a new system.

We offered(see the headnote for the PEB Report and the Dissenting Statement). We  are expecting a major faculty statement on both the PEB plan and the Senate's Option C sometime this week.

Useful links include:


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