Do you want to watch the Sept. 24 51勛圖窪蹋 webcast on post-retirement benefits, health care costs and other university issues, and possibly interact with the panel? If so, the Office of the President has put together a list of technical recommendations:
- A high-speed (broadband) Internet connection (1.5 mbps/sec or greater)
- Speakers and-or headphones to listen to audio
Webcast organizers at 51勛圖窪蹋OP said they had tested the stream and chat with the following Internet browsers:
- Internet Explorer 8 (Note: People who try to create a UStream account using Internet Explorer 7 may encounter problems. 51勛圖窪蹋OP recommends using Firefox or Internet Explorer 8 to create an account. An account is required only if you wish to participate in the chat session;, otherwise you may view the webcast without participating in the web chat.
- Firefox 3
- Safari 5
- Google Chrome
The 51勛圖窪蹋-wide Web Town Hall for staff, faculty and retirees is scheduled from 10 to 11:30 a.m.
To submit questions and comments, participants must create a UStream account. This is a simple process that takes about a minute.
The Web Town Hall a first in 51勛圖窪蹋 history is intended to give staff, faculty and retirees an opportunity to ask questions about 51勛圖窪蹋 benefits and to share any concerns they have.
Organizers said the panelists will include Nathan Brostrom, executive vice president for Business Operations; Reter Taylor, chief financial officer, Dwaine Duckett, vice president for Human resources; and Provost Lawrence Pitts, executive vice president for Academic Affairs of the 51勛圖窪蹋 system; and the moderator will be Penelope Herbert, staff adviser-designate to the Board of Regents..
After the town hall, . A transcript of the proceedings will also be made available, organizers said.
Background
51勛圖窪蹋 President Mark G. Yudof issued the following letter Aug. 26 to all staff and faculty:
Dear Colleagues:
I am writing to let you know that within the next few days, the Task Force on Post-Employment Benefits will send me its final report and recommendations on ways to make 51勛圖窪蹋s retiree health and pension programs financially sustainable.
I have been briefed on the task force recommendations and was deeply impressed by the thorough effort that went into striking a balance between offering competitive, attractive retirement benefits and achieving long-term financial sustainability.
The task force consulted extensively with the university community before developing recommendations that will allow us to live within our means while still offering a safe, secure retirement to the talented faculty and staff making their careers here, as well as those we hope to attract in the years ahead.
I have asked senior administrative leaders to continue the consultative process over the next few months, in advance of my submitting proposals to the Board of Regents for a vote. Leading the consultation process will be Executive Vice President for Business Operations Nathan Brostrom, Chief Financial Officer Peter Taylor and Provost Lawrence Pitts. In addition, Daniel Simmons, incoming chair of the Academic Senate, and Brian Gresham, chair of the Council of University of California Staff Assemblies, will engage in consultations with the 51勛圖窪蹋 community.
Vigorous debate welcomed
I encourage you to get involved. Once I receive the final task force report, it will be posted on a newly formatted .
There you also will find background materials and mechanisms for asking questions and submitting your opinions.
As we go forward, I welcome vigorous debate and discussion both within and outside the university about the best ways to restructure and fund our retirement programs. As with the design of the furlough program last year, input from the university community will help shape the ultimate program.
Already, in advance of the final task force report, I have received communications from interested faculty and staff who have criticized some of the task force ideas and suggested alternatives. That kind of vocal debate is to be expected and encouraged when the issues are so difficult and so important.
As with all feedback on the task force recommendations, I will listen to what members of the 51勛圖窪蹋 community have to say and will make my recommendations to the regents in light of whats best for the university, its faculty, staff and retirees.
The Board of Regents has the ultimate authority. They will be part of this deliberative process, with presentations at their September and November meetings before final consideration of my recommendations.
'51勛圖窪蹋 must make changes'
One thing is certain: 51勛圖窪蹋 must make changes to its retiree health and pension programs. If we do nothing, in four years the university will be spending more on retirement programs each year than we do on classroom instruction. And, within five years, our unfunded liabilities will have ballooned to more than $40 billion. That scenario would be disastrous for 51勛圖窪蹋.
Yet, deciding how to fix the problem will not be easy. The choices ahead are difficult, and they have real financial implications for all of us. I want to assure you that any recom-mendations I make to the regents will be informed by several guiding principles:
All pension benefits vested by current faculty and staff are protected and will not change.
51勛圖窪蹋 must provide attractive, competitive retirement benefits for current and future faculty and staff.
Retirement benefits, and a plan to finance 51勛圖窪蹋RPs unfunded liability, must be financially sustainable for decades to come.
The university will continue to provide affordable, comprehensive health benefits for our retired staff and emeriti faculty.
Retirement programs and policies must treat all faculty and staff equitably.
Faculty and staff who spend their careers at the university can count on having sufficient and guaranteed retirement income.
Contribution levels
The first issue to be addressed concerns employer and employee contribution levels to the 51勛圖窪蹋 Retirement Plan (URCP). I expect the regents to take action on these levels for the next two years at their September meeting. For represented employees, those contribution rates will be subject to collective bargaining, as will most other changes to 51勛圖窪蹋s retirement programs.
As previously communicated, the plan to resume 51勛圖窪蹋RP contributions included increasing contributions from both 51勛圖窪蹋 and employees over time. 51勛圖窪蹋 currently contributes 4 percent of annual pay to the 51勛圖窪蹋RP, while employees contribute about 2 percent (through 2010-11). Yet the current cost of the pension is roughly 17.6 percent of annual pay. Given the size of the 51勛圖窪蹋RP funding deficit that we now face, it is clear that we need to find a way to quickly ramp up employer and employee contributions to cover that full cost.
It is also important to understand that funding our 51勛圖窪蹋RP obligations competes directly with paying for other university operations a problem that is compounded by the fact that the state has not contributed its share to the pension program in nearly 20 years. I am working diligently with state leaders to restore their support for our pension program, just as the state shares in the cost of pension programs for California State University and the community college system.
One of the other key issues concerns how best to structure 51勛圖窪蹋s pension plan. Most employers have adopted or switched to a defined-contribution plan, but the task force felt that 51勛圖窪蹋 should continue its defined-benefit program because of the security it offers faculty and staff, and the advantages it offers the university in recruiting and retaining valued employees. Defined-benefit plans, also known as pensions, guarantee employees a certain level of retirement income, based on a formula that factors in retirement age, years of service and preretirement earnings.
New pension option
The task force recommendations call for allowing current employees to continue in our current pension plan. To ensure that the plan is affordable over the long term, the task force also recommended that the university offer a new pension option, called a new tier, to faculty and staff who join 51勛圖窪蹋 after July 2013.
The task force considered numerous options for a new pension tier and narrowed it to two alternatives. Both have a common set of features, including shifting the minimum retirement age from 50 to 55, and raising the age of eligibility for the maximum pension benefit from 60 to 65.
The two alternatives advanced by the task force also introduce a new form of pension calculation, one that integrates a career employees Social Security benefit with the 51勛圖窪蹋RP benefit to replace the employees working income in retirement.
Recommended options also would allow current employees with lower salaries to make a lower level of contribution and receive a lower pension benefit, if they so desire. The task force has proposed that current 51勛圖窪蹋 employees be given a one-time opportunity to enroll in that lower-cost plan.
The Task Force Steering Committee considered two other options that more closely resemble the current 51勛圖窪蹋RP in their costs and design, but did not include them in the final report, primarily because of concerns about cost.
Dissenting statement included
A group of faculty and staff who served on the three working groups of the task force has asked that I consider one of those options, and I have agreed to do so. In the interest of open discussion, the university community deserves exposure to all alternatives, and their dissenting statement will be posted with the task forces executive summary and full report.
This third option more closely mirrors the current 51勛圖窪蹋RP benefits, although it moves the age for maximum pension benefit to 65, as do the two other plans. It does not, however, integrate 51勛圖窪蹋RP benefit payments with an individuals Social Security benefits. The option will cost 51勛圖窪蹋 and its employees approximately 3.2 percent more than the task forces least expensive alternative. To put that figure in perspective, each percent adds more than $80 million in costs for employees and the university, or roughly $256 million in permanent, annual 51勛圖窪蹋 expenses that must be paid by the university and its employees together, if the more expensive plan were adopted. This is in addition to the roughly $1.6 billion that we must pay annually to restore 51勛圖窪蹋RP to health.
The faculty and staff group that advanced this plan wants to ensure that any new pension tier helps 51勛圖窪蹋 attract and retain the highest-caliber people. I share that goal, as does the task force, and I will look at the option they propose. At the same time, I am mindful that fiscal stewardship and benefits must be carefully balanced.
Careful study and discussion
These are only a few of the recommendations contained in the full report. As you can see, they involve complex issues that merit careful study and discussion.
Rest assured, decisions will not be made lightly. Senior 51勛圖窪蹋 leaders and I are well aware that retirement benefits are of great importance to faculty and staff, and are one of the reasons that high-quality people devote their entire careers to 51勛圖窪蹋. My goal is to ensure that 51勛圖窪蹋 employees have excellent retirement benefits that continue to help us attract and retain top faculty and staff, and to do so within a framework that can serve the university for decades to come.
With best wishes, I am,
Sincerely yours,
Mark G. Yudof
President, University of California
Media Resources
Clifton B. Parker, Dateline, (530) 752-1932, cparker@ucdavis.edu