2011-05-23 "UC Retirement Plan contributions increasing July 1"
Faculty, staff and UC will contribute more to the UC Retirement Plan (UCRP) beginning July 1.
Rates for most faculty and staff will rise to 3.5 percent of pay, up from roughly 2 percent for most employees. The university will pay 7 percent of pay, up from 4 percent. The amount will increase again in July 2012, with employees paying 5 percent and UC paying 10 percent.
Faculty and staff will see the increased contributions reflected in their regular paychecks for July earnings, which are available between July 20 and August 6, depending on whether employees are paid biweekly, monthly or another cycle. All employee contributions are pre-tax.
The new contribution levels affect only active members of the UCRP and are subject to collective bargaining for represented employees.
The Regents approved the increases last fall as part of a plan to address UCRP’s unfunded liability.
For almost 20 years, until the spring of 2010, UC and its faculty and staff did not pay into the retirement plan because the plan maintained a surplus. But a combination of factors – steep market losses, the lack of contributions and changing demographics – led to a deficit.
Until UC and its employees together begin contributing enough to cover the annual increase in cost for active members (in excess of 17% of pay), the pension program’s current $14 billion unfunded liability will grow, adding to the pressures on UC’s operating budget.
In the past year, the Regents have taken a number of actions to address the pension shortfall. Those actions include establishing a new tier of benefits for employees hired beginning July 1, 2013, and approving internal borrowing options to better fund the pension plan.
Learn more about UCRP and Regents actions to reduce the plan’s unfunded liability at the Future of UC Retirement Plan website: http://universityofcalifornia.edu/sites/ucrpfuture/.
7 Comments for this entry
“…But a combination of factors – steep market losses, the lack of contributions and changing demographics – led to a deficit.”
The general S&P500 has recovered since the 2007 and in fact has gained above 2007 so why has funds not recovered and UC has to take loss? What is the guarantee that funds will not sink even after 10% contribution? Why in first place was fund managed so badly?
Sounds like a 3% pay cut to me.
Staff Employee -
No raises for three years, no merits, no cost of living increases, we took a furlough for the UC system last year, as well as contributed 2% of our earnings. The cost of food, gasoline, utilities have increased significantly in the past few years – how about giving the staff a raise!! Faculty and administrators get merit increases meanwhile staff gets poorer and poorer – we need some advocacy on behalf of the staff of the UC campuses! Stop trying to balance the budget on the backs of your staff.
Mark Patterson -
I am a staff member at UCSB and have been here just short of 10 year. 5 years ago I took another position and that was the last time I received a pay increase. I have been doing the job of 2.5 people compared to other similar sized departments on campus, and was assigned 1/2 of another persons job when she retired back in Sept. 2010. Still no increase. Now with this increase in the UCRP, I will see my take home pay drop by 1.5%. How do I keep explaining to my family that I will not get a raise and the university will take more money out. We do not take vacations or spend money frivolously and we live in subsidized housing. There has been no cost of living increase and yet UCSB has spent over a billion dollars in the last decade to start and complete new buildings and other “capital improvements”. Many faculty in my department have received merit increases over the last couple of years, even during the period when the furlough time was in effect and my pay was cut 5%. The debt my family incurred during that time and since just to pay bills and buy food now hangs over us. When is it enough. Stop building and growing enrollment when the UC system cannot afford it. Show some leadership and help those who work long hours, more than we are ever allowed to report to keep things running smoothly enabling students to navigate in an increasing tough and expense academic environment. If you value us as the backbone of the university system. Prove it.
SEEMS TO ME A LOT OF PEOPLE ARE MAKING GOOD MONEY AT UCSD BUT THE PEOPLE ON THE LOWER NEVER SEEM TO GET AHEAD. I AM THE ONLY PROVIDER FOR A FAMILY OF SIX AND THEY JUST RAISED MY RENT. I SURE DIDN’T GET A RAISE INCREASE AND NOW WE HAVE TO LIVE ON $85.00 FOR THE TWO WEEKS AND/OR USE THE CREDIT CARDS WHICH IS A NEVER ENDING BATTLE JUST TO LIVE. I NEED THAT RETIREMENT MONEY NOW OR A RAISE WHERE I CAN LIVE COMFORTABLE LIKE MOST OF THE UPPER PEOPLE WHO WORK FOR UCSD. WHY AM I ALWAYS JUST BARELY MAKING IT. I THINK IT’S CALLED NOT ENOUGH MONEY MADE WHERE I WORK AND TO MUCH CREDIT CARD DEPT TO MAKE UP FOR THE MONEY I DON’T EARN. YOU TRY FEEDING, CLOTHING, PAYING RENT FOR A FAMILY OF SIX ON WHAT I MAKE AND YOU WOULD BE AT YOUR ROPES END TOO. THOSE ARE MY THOUGHTS FOR THE DAY!!!
Yep. No raises for how many years and then within a year from now I’ll be losing $250/month to the pension. Remind me again why I’m working?
Will this increase continue to exclude $19? 3.5%-$19?