Act now to stop UC pension benefit reductions

The University of California is currently considering introducing a new pension plan for its employees hired after 2016.  These proposed changes will dramatically reduce pension benefits for most new faculty. The Academic Senate will be reviewing the proposals over the next few weeks. Your opportunity to provide input to the Senate lasts just a couple weeks. For some purposes, it will be most effective to provide input this week. Contact information is at the end of this document.

This ill-conceived and ill-advised plan, which was negotiated behind closed doors by President Napolitano and Governor Brown without any engagement with the Academic Senate, the Regents, the Legislature, or the larger university community, will do serious damage to the quality of the University of California.

While the details are highly technical the implications are not:

1) This is a serious cut in benefits to faculty and many other professional staff, such as staff scientists and nurses, hired after July 2016.  (See pages 44, 45 and 84 of the task force report.)

2) UC faculty are already much more poorly compensated than faculty at UC’s peer institutions despite the fact that the cost of living in most parts of California is very high. This plan will make it much harder to attract faculty and other professionals and keep them here.

3) This plan does not do anything to make the existing pension system healthier and could actually decrease the rate at which the unfunded liability is retired. (See page 57 of the task force report.)

We agree with the assessment of Academic Senate leaders J. Daniel Hare and James A. Chalfant’s analysis, who concluded:

“If salaries don’t increase to compensate for these reduced benefits, then UC will have to settle for a lower-quality of faculty who did not receive better offers elsewhere. Many UC faculty members were hired in spite of more lucrative salary offers elsewhere, just as many have either declined outside offers or declined to pursue them. It may have been true at one time that benefits made up for our uncompetitive salaries. The 2014 Total Remuneration Study showed that no longer to be the case. While salaries and benefits continue to lag, and we are contemplating making the lag even greater with the new-tier options, it is important to note that most of the non-pecuniary attributes of UC employment also are declining.”

As Academic Senate Chair Dan Hare stated in his remarks to the Regents in September:

“Any reduction in either salary or benefits surely will have consequences for the ability of UC to build and retain a future faculty that is as distinguished as the current faculty. As recommendations are brought forward in early 2016, I encourage the Regents to carefully consider not only the budgetary cost of future retirement options, but also their impact on how faculty members behave in terms of recruitment and retention. If we are not careful, small budgetary savings will risk far greater costs to the University, our students, and the citizens of California.”

We urge you to sign our petition to express your opposition to proposed changes to the UC Retirement Plan. We will forward the names of those that sign to local campus faculty welfare committees so they are aware of local concern about this issue.

UCOP has also set up a comment link where you can provide your feedback on the task force recommendations. We urge you to express your concerns about the plan there and please also send a copy of your comments to us at newtier@cucfa.org.