The Total Comp Issue for UC and the PEB Recommendations

In broad terms, the UC labor officials quoted in the LA Times piece excerpted below are taking the same position as the Academic Senate in the dissenters' report on the Post-Employment Benefits Task Force recommendations. The dissenters' report notes that all of the options under consideration: Option A (which the dissenters reject), Option B (which they might accept), and Option C (which the majority report took off the table and the dissenters want put back into consideration) represent a cut in total compensation. (Previous posts provide links and discussion of the 3 options.) On a total comp basis, UC is behind where it should be by its own calculations. Hence, the Senate position is that if there is a reduction in retirement benefits, there needs to be a definite Regental plan (not a vague intent) to fix the total comp problem.

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Labor leaders say UC benefits changes would hurt lower-income employees: Regents are expected to OK increases in the amount employees and the university must pay toward retirement benefits. Union leaders say it would be hard to agree to such increases without pay raises. (Excerpt)

Larry Gordon, Los Angeles Times

September 16, 2010

As the University of California seeks to fill a potential $21-billion gap in its pension and retirement health plans, labor leaders Wednesday alleged that lower-income employees would unfairly feel the brunt of proposed changes in benefits and contribution levels.

"How can the university continue to attract students and be a renowned institution of higher learning when it permits what in essence is pay and pension discrimination?" Rome Aloise, a Teamsters union official, asked the UC regents at a meeting in San Francisco. More than 14,000 UC clerical and support staff workers are organized with a Teamsters local and have been without a contract for two years.

The regents Thursday are expected to approve increases in the amounts employees and the university must pay toward retirement benefits. For employees, the figure is expected to rise over the next two years from the current 2%, to 5% of their paychecks and for the university, from 4% to 10% of payroll. Until this year, neither side had made any payments for 20 years, turning what had once been an over-funded system into one with potentially huge deficits.
Some union leaders said it would be hard to agree to such increases without pay raises.

Even more contentious are several complicated overhaul proposals the regents are scheduled to review by year's end. Among ideas recommended by a task force are raising the minimum retirement age from 50 to 55 and creating a new tier of benefits for employees who are hired after July 2013. In another possible change, Social Security benefits might figure into the calculations as well.

Unions contend that some of the proposals could disproportionately hurt lower-wage and blue-collar workers. Part of the problem, they say, is that full Social Security benefits don't kick in until age 65 but employees with physically demanding jobs tend to retire earlier than professors...

Full article at http://www.latimes.com/news/local/la-me-uc-pension-20100916,0,5276130.story

UPDATE: There is continuing agitation for a switch to defined-contribution plans for new hires and/or future service. A recent NY Times op ed by former LA Mayor Riordan is an illustration. See http://www.nytimes.com/2010/09/16/opinion/16riordan.html?_r=1&ref=opinion