Wednesday, May 30, 2018

Money with a proviso

...Pension wars, UC front

Assembly Democrats have a sweet offer to help the University of California shore up its pension system, but the deal comes with a catch that would block it from offering an alternative plan that's popular with some new employees.

Democrats are offering $120 million toward the UC's unfunded pension liability. To get the money, the UC would have to refrain from offering a 401(k) style retirement plan to tens of thousands of rank-and-file workers represented by AFSCME 3299 and University Professional and Technical Employees.

Already, thousands of workers are opting for the 401(k) plans. The UC system reports that 37 percent of new employees want the 401(k) instead of a traditional public employee pension. 

Assembly Budget Committee Chairman Phil Ting said the proposal is intended to ensure that rank-and-file UC employees have a retirement plan that they can count on in their golden years. He's open to retaining 401(k) plans for high-earning UC leaders who earn hundreds of thousands of dollars a year.

"We still believe that defined-benefit program is the best (for) long-term economic security. We're not moving away from that," he said at a press conference on Tuesday. "We didn't think it was appropriate for UC to move away from that model for the bulk of their employees making $60,000 a year."

Assembly leaders put their pitch in the budget proposal, and they'll try to persuade Gov. Jerry Brown and Senate leaders to adopt it.

UC workers represented by AFSCME and UPTE don't have a choice to take a 401(k). That depends on their next contract, and the UC is pressing them to accept a deal that would open new workers to defined contribution retirement plans. The unions characterize the offer as a "risky" one that could weaken the University of California Retirement Plan. 

Earlier this year, Sen. Steve Glazer, D-Orinda, offered a bill that would have let new state workers choose between a 401(k) plan and a CalPERS pension. Pensions tends to reward career civil servants, but people who don't want to spend decades with a single employer tend to have more to gain from a defined contribution plan.

Glazer's bill died in committee, where SEIU California lobbyist Terry Brennand called it a "disaster waiting to happen."

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