Our UC retirement income is a form of deferred compensation. The University of California Retirement Plan (UCRP) is a defined benefit plan (DBP) under which your retirement income is based on a calculation of your years of UC service, your age at retirement, and your highest average 36 consecutive months of pay. Eligible UC employees hired before 2016 are enrolled in UCRP.
DBPs are a much more secure and predictable form of retirement income compared to defined contribution plans (DCPs) like a 401k plan. A 401k plan shifts investment risk from the employer to the employee and cannot guarantee a level of retirement income. DCPs also underperform over time compared to DBPs.
UCOP management is trying to shift away from a pension plan to a defined contribution plan. Employees hired after June 30, 2016 are given the option of choosing a 401k plan over the UCRP. As more employees leave the pension plan, it becomes less viable over time.
• A single tier pension plan (DBP) for all UC staff and faculty. This provides the strongest form of guaranteed post-employment income while leveraging group investment power and minimizing employee risk.
• Equitable treatment of staff and faculty regarding access and contributions to post-employment pension and other benefits.
• Shared governance of our pension plan. UCRP is an anomaly in the public sector pension world in that there is no staff representative on UCRP’s governing board. Our pensions should receive meaningful input from those who are affected by its policies and investment strategies.
• Future increases in employee pension contributions must be offset by pay increases.
• A socially responsible investment strategy that includes divestment of funds from the tobacco and firearms industries, Energy Transfer Partners, Citibank, Wells Fargo Bank and other Dakota Access Pipeline funders, and other industries that harm public health and are counter to the interests of working people.
• Establishment of a trust that would guarantee retiree health benefits (which are not an entitlement and are currently vulnerable to reduction, cost-shifting, and elimination).