Note that lifting the ceiling would not affect all high-paid employees. It would affect only those whose age and service, combined with their pay history, crossed the line.
Highest-paid UC execs demand millions in benefits (excerpts):
Nanette Asimov, San Francisco Chronicle, Dec. 29, 2010
Three dozen of the University of California's highest-paid executives are threatening to sue unless UC agrees to spend tens of millions of dollars to dramatically increase retirement benefits for employees earning more than $245,000. "We believe it is the University's legal, moral and ethical obligation" to increase the benefits, the executives wrote the Board of Regents in a Dec. 9 letter and position paper obtained by The Chronicle. "Failure to do so will likely result in a costly and unsuccessful legal confrontation," they wrote, using capital letters to emphasize that they were writing "URGENTLY." Their demand comes as UC is trying to eliminate a vast, $21.6 billion unfunded pension obligation by reducing benefits for future employees, raising the retirement age, requiring employees to pay more into UC's pension fund and boosting tuition.
The fatter executive retirement benefits the employees are seeking would add $5.5 million a year to the pension liability, UC has estimated, plus $51 million more to make the changes retroactive to 2007, as the executives are demanding. The executives fashioned their demand as a direct challenge to UC President Mark Yudof, who opposes the increase.
"Forcing resolution in the courts will put 200 of the University's most senior, most visible current and former executives and faculty leaders in public contention with the President and the Board," they wrote…
Without naming Yudof, the executives claim that denying their benefit increase would breach UC's code of ethics, place Yudof in a conflict of interest and jeopardize the system's ability to recruit top employees. The 36 executives who signed the letter include Mark Laret, chief executive officer of UCSF Medical Center; Christopher Edley Jr., dean of the UC Berkeley law school; and Marie Berggren, chief investment officer for the UC system. They want UC to calculate retirement benefits as a percentage of their entire salaries, instead of the federally instituted limit of $245,000. The difference would be significant for the more than 200 UC employees who currently earn more than $245,000...
1999 promise cited
The executives say the higher pensions are overdue because the regents agreed in 1999 to grant them once the Internal Revenue Service allowed them to lift the $245,000 cap, a courtesy often granted to tax-exempt institutions like UC. The IRS approved the waiver in 2007. Yudof wants the regents to rescind their original approval of the higher pensions, but withdrew his recommendation after receiving the letter.
…The roots of the pension dispute go back to 1999, five years after the IRS limited how much compensation could be included in retirement package calculations. But even after the IRS granted UC's waiver in 2007, nothing changed. University executives were having troubles of their own that year. President Robert Dynes resigned in 2007 after it was discovered that UC was awarding secret bonuses, perks and extra pay to executives. State auditors also found that UC's compensation practices were riddled with errors and policy violations.
UC officials also had become aware of another big problem: UC's pension obligations were about to outstrip its ability to pay retirees. Neither UC nor its employees had paid into the fund since 1999.
It took until this year for UC to act. In September, a retirement task force offered Yudof several options for closing the $21.6 billion gap - and one to widen it: increasing executive pensions. Dissenting members of the task force said it would be "unseemly" to expand executive pensions. Tuition had just been increased by 32 percent this fall, and the regents were poised to raise it another 8 percent for fall 2011. They also voted to shift more money into the retirement fund from employees' pockets, as low-wage workers worried about retiring into poverty.
"I think it's pretty outrageous that this group of highly compensated administrators of a public university are challenging the president and the chair of the Board of Regents," said Daniel Simmons, chairman of UC's Academic Senate and a law professor at UC Davis.
…These are the 36 highly compensated UC executives threatening a lawsuit unless the cash-strapped University of California increases their retirement benefits:
NOTE: I AM REPRODUCING ONLY THE UCOP AND UCLA INDIVIDUALS BELOW. YOU CAN FIND THE COMPLETE LIST IN THE FULL ARTICLE AT THE URL BELOW.
UC central offices
Satish Ananthaswamy, CFA senior portfolio manager, office of the chief information officer
Marie Berggren, chief investment officer
William Coaker Jr., senior managing director of equity investments, office of the treasurer
Lynda Choi, managing director, absolute return, regents' office of the treasurer
Linda Fried, senior portfolio manager
Gloria Gil, managing director of real assets, office of the treasurer
Jesse Phillips, senior managing director, investment risk management, regents' office of the treasurer
Tim Recker, CFA managing director of private equity, regents' office of the treasurer
Dr. Jack Stobo, senior vice president, health services and affairs
Randolph Wedding, senior managing director, fixed income, office of the treasurer
Roger Farmer, chair, Department of Economics
Dr. David Feinberg, CEO of the hospital system; associate vice chancellor
Franklin Gilliam Jr., dean, School of Public Affairs
Dr. Gerald Levey, dean emeritus
Virginia McFerran, chief information officer of the health system
Judy Olian, dean and John E. Anderson chair, Anderson School of Management
Amir Dan Rubin, chief operating officer of the hospital system
Dr. J. Thomas Rosenthal, chief medical officer of the hospital system; associate vice chancellor
Paul Staton, chief financial officer of the hospital system…
UPDATE: AP picks up the story. It appears here in the LA Daily News: