The full report - scroll down for URL - contains photos of the demonstration at the Regents. A recording of the Regents meeting on the pension and retirement issue is available in an earlier post on this blog.
UC task force: pensions ‘frightening’ challenge (excerpt)
By Ed Mendel, calpensions.com, 9/22/10
SAN FRANCISCO — After two decades of getting by only on investment earnings, an apparent record for public pension funds, the University of California pension system faces what a task force calls a “frightening challenge.” A retirement system that got no money from employers and employees during a contribution “holiday” that began in 1990 now needs about $1.6 billion this year, 20 percent of the payroll, to be properly funded. It’s on track to get about $480 million in employer-employee contributions. The annual amount needed for proper funding could be more than $2 billion two years from now.
…Raising employee contributions is a pay cut, hitting low-income workers and others who have not had pay raises, while eroding generous retirement benefits that help UC attract top talent.
UC wants the state to resume contributions, a matter of equity since CSU and community college retirement programs get state money. But the state has a $19 billion deficit and lawmakers are in the third month of a budget deadlock.
Every $1 not received from the state, officials say, costs UC an additional $2 from other sources.
The state provides a third of the UC budget, the rest coming from medical centers, federal sources, grants and other operations. Without a state retirement contribution, UC cannot levy similar contributions on other budget sources.
…Contributions to the UC pension system, which has an investment portfolio currently valued at about $34 billion, resumed in April under action taken by the Regents last year. Money that employees had been required to put into tax-deferred individual investment accounts, 2 percent of pay, was redirected to the pension system. UC contributed 4 percent of pay. Last week, the Regents voted to increase the employee contribution to 5 percent of pay and the employer contribution to 10 percent by July 2012. The employee increase must be approved in bargaining with labor unions.
In November the Regents are scheduled to consider proposals to reduce pensions for new hires beginning in July 2013. Many retirees would be required to pay more for health coverage…