UC Execs Demand Big Pension Boost
OAKLAND, Calif. (AP) — Top executives at the University of California are threatening to sue if employees earning more than $245,000 annually do not receive a major pension hike.
The demand appears in a Dec. 9 letter and position paper to the UC Board of Regents obtained by the San Francisco Chronicle.
The university estimates that agreeing to the hike would add $5.5 million yearly to its already $21.6 billion unfunded pension liability. It also would have to pay a one-time $51 million fee to make the increases retroactive to 2007.
Currently pensions are calculated as a percentage of the first $245,000 earned by an employee.
The three dozen executives who signed the letter say the regents agreed in 1999 to hike pensions once the Internal Revenue Service allowed them to lift the $245,000 cap. The IRS rescinded the limit in 2007.
“Employees made career decisions in good faith, based on the expectation that the regents’ policy would be implemented,” they wrote.
University president Mark Yudof has opposed the pension increases as UC has wrestled with its already exorbitant unfunded liability to existing employees.
In an effort to close the gap, the university is reducing benefits for future employees, raising the retirement age and requiring higher employee contributions.
The regents also recently approved an 8 percent hike on student fees for next year on top of a 32 percent increase this year. Fee hikes in the wake of California’s budget crisis have led to large student protests, including the occupation of several buildings.
Executives who signed the letter include the chief executive of the UCSF Medical Center, the dean of UC Berkeley’s law school and the UC system’s chief investment officer.
The Chronicle said the executives did not respond to requests for comment or declined to be interviewed.
Gov.-elect Jerry Brown, who is scheduled to be inaugurated Monday, criticized the executives in a statement.
“These executives seem very out of touch at a time when the state is contemplating billions of dollars in reductions that will affect people who are far less advantaged,” Brown said.
(Copyright 2010 by The Associated Press. All Rights Reserved.)