Thursday, December 10, 2015

Note to ROTF: Consensus is not required; conflicting views are permissible

Sometimes conflict is inevitable
ROTF, the Retirement Options Task Force, was set up to deal with creation of a third tier in the UC pension system in the wake of the Committee of Two deal between the governor and the UC prez. It is operating under a very compressed time frame. Presumably, something will have to be presented to the Regents in January.

Let's start with the observation that the Committee of Two really didn't understand pension mechanics and just started from the political premise that UC's pension should look like other public pensions. Did they understand the implication of the pension cap, beyond the obvious point that pensions would not be higher than the cap? It has way, way more effects than that because it limits the amount on which the pension is calculated. So even those newly-hired faculty who didn't have enough service to hit the cap under Tier 2 would have their pension reduced if they earned above the cap. While a defined contribution (DC) supplement was envisioned to offset the disadvantage of the cap, the cap mechanism pushes DC contributions toward the end of the career when you instead want them early on to earn interest.

Trying to deal with the mess the Committee of Two left is a difficult task for ROTF. It may well be that the mess it left cannot be cleaned up in any politically feasible way. If so, there is no requirement that everyone on the Committee has to agree with the recommendations. There is no requirement for consensus for the sake of consensus. There can be dissenting, minority reports. Just a reminder of the obvious, particularly for Academic Senate representatives.

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