Thursday, January 6, 2011

California and the UC System

I'm sure that all of you have heard about the handful of UC employees who want a raise in their pension. If not, here is a link to the article that was in the San Diego Union Tribune:

Basically, in 2007, a waiver was granted to the UC System lifting the pension limits on its highly compensated employees. According to corruptauthority.com, The University’s pension plan is currently unfunded in the amount of $21.6 billion, and officials have been rushing to boost tuition payments, reduce benefits for future employees and requiring them to pay more of their salaries into the plan. The University System has a Task Force that created a report that gives the system options for fixing their broken plan.

The UC System does have a plan in place to help the highly compensated fund their pensions more fully. This plan is a non-qualified plan, and is discretionary, so I'm not sure if its currently being funded.
The UC Regular employees have voiced their opposition to the proposed increases in the pensions for the highly compensated, and even have a petition going around to stop it, and the top leaders of the system are opposed to it as well, so chances are it will get little traction at the UC level.

However, the 36 employees who signed the petition have threatened to sue and the UC system has retained lawyers just in case, according to the LA Times article.

Assemblyman Jerry Hill has even threatened to bring Legislation that will prevent the UC system from increasing the pensions for the highly compensated.

UC is not the only University with pension problems, and the WSJ reported in April of 2010 that the liability for the three systems, CalPers, CalSTRS, and UC, was over 500 Billion Dollars.

The reality is that with or without the additional pensions that these employees want, California Taxpayers will be on the hook for these pensions, like it or not.