Monday, October 25, 2010

Important message regarding the likely recommendations of President Yudof regarding the UC pension

Important message regarding the likely recommendations of President Yudof regarding the UC pension. Please note the last sentence (in bold) in the email.

Date: Mon, 25 Oct 2010 07:17:41 -0700
From: Daniel Simmons
Subject: PEB Update


There is a light at the end of the PEB tunnel. President Yudof informed me last week that he has reached his decision on the recommendations of the PEB task force recommendations. He will recommend to the Regents that they adopt a modified version of Option C with a consistent 2.5 percent age factor for all employees, an employer contribution of 8.1 percent of covered compensation, and an employee contribution of 7.0 percent. The total normal cost of the new-tier plan is 15.1 %, which is slightly below the total normal cost of revisions to the CALPERS benefits included in the recent State budget. The new-tier benefits will apply to employees hired after July 1, 2013.

President Yudof will carry his recommendation to the Regents at the November meeting. The Regents will be expected to act on the recommendations at a special meeting on December 13. Bob and I have discussed this option with a couple of key Regents, and I anticipate that the President's recommendation will be supported, but of course there is no certainty.

The Regents will not be asked to act on employee contribution levels for current employees under continuation of the existing benefits of the current plan. As you know, employee contributions will ramp up to 3.5 percent on July 1, 2011, then 5.0 percent on July 1, 2012. The finance plan in the PEB task force report contemplates an increase to 7.0 percent, then perhaps higher over time perhaps increasing to 8.0 %.

The recommendation will maintain the existing COLA provisions, unchanged for the new-tier.

President Yudof will also recommend that Appendix E not be implemented, rejecting the recommendation in the task force report.

At Wednesday's Council meeting we will need to consider the tabled UCFW resolution regarding the task force options and a position on President Yudof's recommendations. While the President's decision is taken in advance of a formal expression of opinion on the specifics of the proposal, I hope you all will appreciate the fact that the President has been fully aware of the Senate's views on the various options and that his recommendation is consistent with the positions expressed by almost all Senate agencies in their review of the task force recommendations. Bob and I, working with Joel Dimsdale, chair of UCFW, will attempt to craft a resolution for your consideration that reflects the UCFW positions, which have been endorsed in one form or another by almost all of the divisions and committees. I think it is important to memorialize the Senate's recommendations on the various options presented as a reflection of all of the hard work that has gone into examining those positions. I also hope that we will be able to agree on a statement in support of President Yudof's recommendations, along with a recognition that the University needs to focus on competitive remuneration for both faculty and staff.

I look forward to a lively an interesting discussion at Council. You may, if you wish, circulate this message to the members of your committees and to colleagues on the campuses.


Daniel L. Simmons
Professor of Law, UC Davis
Chair, Academic Senate
University of California

UPDATE: There are several pension-limitation propositions on local ballots in California this November. As pointed out in prior posts a) we could get hit with such a proposition statewide when the new governor takes over and b) the probability of UC being able to go its own way is improved (no guarantees here) if the Regents have a plan in place. On the local propositions, see


Toby Higbie said...

No mention of covering the unfunded liability?

Anonymous said...

$500,000 public employee salary at UC Berkeley does NOT help President Mark Yudof

Anonymous said...

Rumor is the ultra rich will be suing to implement Appendix E