UC to Consider Proposed Changes to UC Retirement Benefits

By Lisa Cisneros on August 27, 2010

Mark Yudof

The University of California released a final report on August 27 with recommendations on ways to make UC’s retiree health and pension programs financial sustainable.

The entire report, an executive summary and related news and information is posted on the Future of the UC Retirement Benefits website.

Like many public employers, UC has seen the cost of its retiree health and pension programs increase significantly in recent years and must find ways to keep benefits financially sustainable for the future. In fact, UC has an unfunded liability of about $21.6 billion for its pension and retiree health benefits, UC officials say.

Importantly, UC officials emphasize that current faculty and staff should not worry about losing the vested retirement benefits that they have already accrued. Those benefits are guaranteed under state law.

Among key recommendations:

  • UC would continue its defined-benefit program, also known as pensions, and current employees would continue in the existing program;

  • UC would offer a new pension program option called a new “tier” to faculty and staff who join UC after July 2013.

The recommendations were shaped by a task force comprised of more than 40 faculty members, staff, administrators and retirees as well as numerous others who weighed in on the issue over the past year. The task force also met with members of the Academic Senate, the Union Benefits Coalition and the Staff Assembly and conducted more than 60 forums for faculty, staff and retirees at each UC campus location last fall and this spring.

UC President Mark Yudof said in a letter to the UC community that he has been briefed on the recommendations by the Task Force on Post-Employment Benefits and was “deeply impressed by the thorough effort that went into striking a balance between offering competitive, attractive retirement benefits and achieving long-term financial sustainability.” Read his letter [PDF]

UC Virtual Town Hall on Post-Retirement Benefits

When: September 24, at 10 a.m.

  • Watch a live webcast at UStream
    (No login required.)
  • Submit questions, comments
    (Must sign up for UStream account.)
  • View archived copy of webcast at UStream.
    (A transcript will be made available.)

UC Regents will vote on a plan in September to increase employer and employee contributions to the UC Retirement Plan (UCRP) for the next two fiscal years. For employees represented by unions, their contribution rates will be subject to collective bargaining, as with most other changes to UC’s retirement programs.

The plan to resume and ramp up UCRP contributions is necessary since UC currently contributes 4 percent of annual pay to UCRP, while employees contribute about 2 percent. But the current cost of UC’s pension plan is roughly 17.6 percent of annual pay, according to Yudof.

Yudof is expected to submit his recommendations for changes to post-employment benefits to the Regents in November. He encourages the UC community to get involved in the deliberative process by reviewing the recommendations, asking questions and submitting feedback.

“As we go forward, I welcome vigorous debate and discussion both within and outside the University about the best ways to restructure and fund our retirement programs,” Yudof said in his letter. “As with the design of the furlough program last year, input from the University community will help shape the ultimate program.”

UC Seeks Input on Complex Issues


The University is offering faculty and staff several opportunities to share their opinions on changes to the highly coveted retirement benefits – via feedback mechanisms on the new website and through an upcoming systemwide town hall meeting.

The UC Office of the President (UCOP) is hosting a town hall meeting and will be streaming it beginning at 10 a.m. on Friday, Sept. 24 on the UStream website. The town hall will provide members of the UC community an opportunity to ask questions and share concerns about the recommendations. A login is not necessary to view the town hall meeting.

“Our goal is to give faculty and staff a chance to learn more about these complex issues and to provide a forum in which they can hear directly from, and engage with, senior leaders about the things we are doing to ensure that the University remains an attractive place to work,” said Nathan Brostrom, executive vice president of business operations at UCOP.

Brostrom will be among the panelists to participate in the September 29 town hall meeting. Other UC leaders include Dwaine Duckett, vice president for Human Resources; and Lawrence Pitts, provost and executive vice president for Academic Affairs.

“Rest assured, decisions will not be made lightly,” Yudof said in his letter. “Senior UC leaders and I are well aware that retirement benefits are of great importance to faculty and staff, and are one of the reasons that high-quality people devote their entire careers to UC. My goal is to ensure that UC employees have excellent retirement benefits that continue to help us attract and retain top faculty and staff, and to do so within a framework that can serve the University well for decades to come.”

Related Links


Future of the UC Retirement Benefits website

Mark Yudof ‘s letter [PDF]