Thursday, June 4, 2015

Yet Another Pension Headache for UC

UC already has a pension headache thanks to the Committee of Two deal which would require a hybrid defined benefit/defined contribution plan for new hires in 2016. Now a ballot initiative is shortly to be filed which would effectively ban any defined benefits for new hires beginning Jan. 1, 2019. Even a hybrid plan would be excluded. If enacted by voters, it would apply to all state and local pension plans including the UC plan. Thus, there would in effect be yet another tier added and it would be defined contribution exclusively. UC could offer a defined benefit pension benefit only via a vote of the state electorate after Jan. 1, 2019 (or when labor agreements in effect at that time expire).

Supporters would need to come up with $2.5-$3.5 million to get the initiative on the ballot, according to their own estimates.* There would then be a hotly contested campaign on both sides involving many more millions of dollars. (The opposition would primarily have to be financed by public sector unions.) The proposed initiative is at

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