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Friday, July 7, 2017

Friday, July 7, 2017
The Office of the President is asking for authority to lower UC's contribution to retiree health benefits.  This reduction would take the form of removing UC's commitment to a payment floor of 70% of aggregate retiree health premiums (7).  This figure had been set as part of the long and public discussion over benefits and debates that surrounded the President's Task Force on Post-Employment Benefits and approved by the Regents in 2010.  That discussion you may recall was long and involved and resulted in a series of steps (including the restarting of University contributions) to help improve the long-term stability of UCRP.  Importantly, at that time employees agreed to what was, in effect, a pay cut through resumption of employee contributions to a retirement system that had been poorly managed by the Regents.  These debates were heated and the results controversial.  But they resulted in what current Senate Chair Chalfant has called an implicit "social contract."  UCOP is now seeking the authority to shred a significant part of that agreement.

Just as striking has been the lack of genuine consultation with either faculty or staff, let alone serious public discussion of the implications of further shifting the burden for retirement costs onto employees.  There was no formal proposal distributed to the Senate for systemwide review; the relevant systemwide Senate committees were only consulted about a related issue concerning a proposed limit of 3% annual cost increases, a proposal not included in the current UCOP request (2) I do not know if any of the staff organizations have been consulted. The Regents item offers no justification for the action: no modeling to suggest its real financial effects on the University or its employees, no consideration of its implications for recruitment and retention and certainly no acknowledgement of the labors and reasons for the establishment of the 70% floor in the first place.

Nor is there any explanation for why circumstances have changed so drastically that UCOP is asking for what seems to be unchecked authority to reconfigure retiree health care.  Indeed, as the Senate notes, it "is also troubling that the proposal will be presented to the Regents Finance and Capital Strategies Committee rather than the Governance and Compensation Committee, which has the topic of benefits in its charter" (2).  The new Regent organization was supposed to provide clearer lines of responsibility and greater transparency of decision making.  This treatment of an issue of broad workplace concern as a technical financial issue does not inspire confidence that that is the case.

For all of these reasons, the Senate, CUCFA, and the CUCEA have opposed this proposal.  They are right to do so.

I cannot leave without noting that, whatever one's perspective and judgement about the State's Audit of UCOP, one clear lesson that I would have thought had been learned was the need for greater transparency about decision making, more open debate about important university issues, and the increased importance of providing reasons.  In pushing this proposal at the July Regents meeting (and it is an action item not a discussion item) UCOP instead is suggesting that the Regents approve an ill defined, inadequately justified rush item whose real implications for the University have not been seriously debated.  If UCOP insists on moving forward with this proposal it cannot be surprised if its already damaged legitimacy among faculty and staff shrinks even further.