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BFA Co-Chair statement to UC Regents about new UCRS tier

BFA Co-Chair Professor Celeste Langan spoke on behalf of the UC Faculty Associations at the July 22, 2015 UC Regents meeting during the public comment period. Below is a copy of her full statement:

As co-Chair of the Berkeley Faculty Association and on behalf of the Council of UC Faculty Associations, I wish to address the Regents concerning the third discussion item of the Finance Committee agenda, item F3, “Update on Final 2015-16 Budget.”  The update, produced by the Office of the President, misleadingly claims that the final budget “incorporates the funding framework developed by UC and the Governor.” If you’ll recall, the “framework” of the May Revise proposed that the state make a contribution of $436 million toward the unfunded liability of the UC Retirement Plan.  The final budget, however, promises only a “one-time payment” of $96 million; there is nothing in the budget that commits the state to two additional payments of $170 million.  Yet even this meager one-time payment is contingent upon Regential approval of a cap on pensionable salary consistent with PEPRA (Public Employee Pension Reform Act) for employees hired after July 1, 2016.

The Council of UC Faculty Associations is opposed to the University making permanent changes in the structure of its retirement plan in exchange for a very modest one-time contribution from the State. We are especially opposed to the introduction of a full defined-contribution option.  There is absolutely no justification for the proposed introduction of a full defined-contribution option; neither the Legislature nor the Governor called for the introduction of a Defined Contributions plan in aligning the UCRP with PEPRA. Yet UCOP seems bent on introducing such an option, to the point that their statement exposes their intention as a foregone conclusion rather than a possible outcome of consultation and deliberation — those elements of what we once understood as “shared governance.”

I call your attention to the third paragraph on page 3 of the F3 agenda item.  First OP declares, “The President will convene a retirement options task force to advise on the design of new retirement options that will include the pensionable salary cap consistent with PEPRA.  The retirement options will be brought to the Regents next year for review and approval.” But apparently the “design of new retirement options” is a fait accompli, for the penultimate sentence of that paragraph declares, “new employees will have the opportunity to choose a fully defined contribution plan as a retirement option, as an alternative to the PEPRA-capped defined benefit plan.”

Since the two minutes allotted in the public comments session is the temporal equivalent of Twitter’s 140 characters, let me ask: #What’s up with UCOP?  If I had to speculate, I’d say that UCOP’s attempt to replace Defined Benefits with Defined Contributions suggests its preference for a mobile, “flexible,” precarious professoriate with a consequently short-term institutional memory — a professoriate that wouldn’t recall that only 6 years ago, the relative merits of defined contribution versus defined benefit plans were thoroughly, carefully, and widely discussed by UC constituents. Given substantial evidence that defined benefits are more cost-efficient than defined contributions in achieving the same level of benefits, it was agreed that the University of California was best served by continuing with UCRP as a defined benefit plan. Thus in 2010, when the President recommended and the Regents endorsed pension reforms, UCRP was preserved as a defined benefit plan.

Ironically, the paragraph in question concludes, “For represented groups, retirement options will be subject to collective bargaining.” Well, the UC Faculty Associations represent a good number of those faculty, members of the Academic Senate, without collective bargaining rights, and we say that UCOP has vitiated the interests of that faculty, both those vested in the current UCRP and those who will be hired after 2016.  We deplore the introduction of a different tier of faculty benefits, but we firmly oppose the attempt of UCOP to introduce a fully defined contribution plan in this untoward and unjustified manner.

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