Dear Colleagues,
We write to inform you of changes to our pension plans. Sadly, at a time when our salaries stagnate or decline in real terms, and our health benefit costs have sky-rocketed, our pension plans are now also being revised without consultation from 1 July 2024. Just as alarmingly, these changes have been announced with very little warning or explanation of their effects.
The changes have variable effects. They will benefit those who opt to take their pension as a lump sum and make no difference for those who do not name a contingent annuitant as their beneficiary. The greatest negative impact appears to be on those aged 50-65 who name a contingent annuitant for continuation of survivor pension payments. The university’s announcement suggests benefits will decrease for the retiree and their partner (if these people are of similar ages) between 1.1 and 0.3%. In fact, it appears that if a retiree’s contingent annuitant is younger, the decreases may be larger. That is because the changes are based around a revision of the mortality tables for life expectancy: reducing men’s mortality rate by 15% and women’s by 5%.
This change was approved at the Regents meeting in July 2023. However, the announcement of this change was not posted on the UCNet website until 4 March 2024. At Berkeley, the Vice Provost for Faculty Affairs wrote to MSOs on 28 March asking them to ensure that those scheduled to retire by 1 July 2024 were made aware of the changes by following this advice. The new pension calculations were not factored into the pension estimator until 1 April, leaving faculty who planned to retire this year just three months to reconsider. Many faculty have still not received warning or explanation of the changes.
This lack of communication from the Vice Provost for Faculty’s office is not surprising, given that close to 150 colleagues are still waiting to hear about, or receive an apology for, their delayed merit and promotion cases due by 1 July 2023.
Faculty at Berkeley, especially those in the pre-2013 pension tier, have often worked for many years at lower salaries than their colleagues at elite universities in the hope and expectation that the deferred benefit of their pension would reward their service. That pension, already degraded for those in the 2013 and 2016 tiers, is again being subjected to changes that may be damaging for some faculty.
This news is especially unfortunate given that last week the office of the Chancellor received a 36% raise with Rich Lyons’ salary reaching a staggering $946,450 pa.
Berkeley Faculty Association