Inequality

Not equal

[Beginning of rant.] As we have blogged about from time to time, UC - thanks to the Committee of Two - is now embarked in trying to come up with a pension plan for new hires that will operate with the same PEPRA cap as CalPERS. And, as we have also noted, the PEPRA cap is not suited for UC and its faculty. So any feasible scheme will at best be a way of coping with a bad deal.

The fact is that from the point of view of politicos - such as the two governors who negotiated a pension deal for UC - all pensions are the same. So why should one be any different from another in terms of its underlying formulas? But the two plans are not equal. CalPERS is unlike UC's pension plan in many ways. For example, the trustees of the UC plan are the Regents. The function of the Regents was (is) to keep UC insulated from politics. That goal has not always been achieved, but that insulation is the purpose. In contrast, as the Calpensions online newsletter reminds us today, CalPERS has governance issues related to its board and basic institutions.* UC has not had a bribery scandal; CalPERS has, for example.

Bottom line: CalPERS has its problems precisely because its governance has been far more "political" than has been the case for UC's pension. And now UC has a problem thanks to the ad hoc intervention of two politicians. [End of rant.]
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*http://calpensions.com/2015/12/21/calpers-considering-term-limits-for-board-leaders/