AP Voices: Administrative professionals organizing for change
February 05, 2016
UC 2016 New Retirement Benefit Proposal
What does it mean for UC Administrative Professionals?
Once again, UC is riding the wave of political attacks on public employees to cut retirement compensation for all new employees, beginning in July. A “committee of two” composed of UC President Janet Napolitano and CA Governor Jerry Brown agreed to cap pension income near the Social Security wage base at a current figure of $117,020/year. The cap will significantly cut pensions for new faculty and directors, and many new employees in the UC medical enterprise. UC has proposed a supplemental savings plan for new employees with salaries exceeding the cap, which they would be responsible for investing.

UC also has proposed, independently of the Governor and the State, to allow new hires to opt out of the pension completely and participate in a savings plan only. Again, savings will depend entirely on how new employees invest their contributions. The advantage of a savings plan is that new employees can take their and UC’s contribution (net any investment gain/loss) with them when they leave UC, after working just one year or more. UC estimates that up to 40% or more new hires will opt out of the pension!

Why this is a bad plan
Making the pension optional for new employees encourages turnover. It discourages a UC career, along with all of the important career benefits. A large number of new employees opting out also would shrink our robust pension fund, currently exceeding $50 billion, in which all current employees and retirees participate. The time may come when UC simply stops offering the pension to new employees. In this case, employee contributions would cease when everyone participating in the pension retires. Loss of contributions, when combined with inevitable financial crashes, would make the pension more expensive for UC to maintain at 100% guaranteed funding. Furthermore, data shows that current retirees who depend solely on individual retirement accounts (401Ks and their equivalent), often do not have enough saved to support them adequately.

What happens now?
President Napolitano will present her final recommendations to the UC Board of Regents for approval at their March meeting. More than the 2013 Pension Tier, which raised the normal retirement age for new employees from age 60 to 65, these changes would have far-reaching negative impacts on all career employees. Napolitano has requested comments from all staff on the proposed changes by February 15.

What you can do

  1. APs are encouraged to review the information and submit comments to UC by February 15.

    Suggested message:
    “The new pension cap and retirement savings plan would discourage those seeking a career at UC, and undermine the benefits of dedicated current employees. It’s not reasonable to expect that new employees would be content with far lesser benefits than current colleagues. This proposal would threaten the quality of faculty, professionals, and staff upon whom the University is dependent for achieving excellence. I am absolutely opposed to the changes that have been proposed.”

  2. Sign this petition to protect your pension.

  3. Union representation with a contract negotiated through collective bargaining is the best way  Administrative Professionals can secure our pension and other employment benefits. Join the UPTE campaign for union representation for Administrative Professionals.

More Information

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