Protecting your pension with UPTE

Recent changes by UC in the pension for non-unionized employees have highlighted what is at stake for their future. UPTE-CWA is the union that wants to keep the UC Retirement Plan (UCRP) going strong.

UPTE members are enrolled in UC’s defined benefit pension plan, which differs dramatically from the usual 401(k)-style defined contribution type plan.

About UC’s defined benefit pension plan (UCRP):

  • After five years, you’re vested in the UC pension plan.
  • If you choose to leave UC after five years and are vested in UCRP, you can leave the money in the UC plan as an inactive UCRP member and wait until you retire to receive the income. Your pension payment will continue to grow as you grow older.
  • When you are 50 years old or older and have five years UCRP service credit, you become eligible for your UCRP retirement income. The pension payment is determined by a formula of your age, your service credit, and your highest annual compensation.
  • If you are laid off for budgetary reasons and don’t yet have the five years service credit to be vested in the UCRP, you might be able to buy service credit to make you eligible to be an inactive UCRP member who keeps the money invested with the plan until age 50 or more and receives it as retirement income.
  • If at a later date, you return to work at UC, even if you’ve taken cash out of the plan, you may be able to pay it back with interest and re-enroll in the UCRP.
  • If you cease to be employed by UC and want to cash out then, you may take your employee contributions plus interest with you, but you would forfeit the employer’s contributions. In this case, you won’t be able to receive a pension later.
Defined Benefits Plan Defined Contribution Plan
Hands down, defined benefit pension plans like UC’s are the gold standard of retirement income security: a guaranteed monthly amount for life with options for survivors. High quality employees want defined benefit pensions and employers who offer them have the hiring advantage.

 

The trend among employers has been to shift away from defined benefit plans. Defined contribution** plans are touted as the alternative. They carry little risk for employers but a lot of risk for employees. Unlike with UC’s defined benefit plan, the amount of retirement income from defined contribution plans is not guaranteed, not indexed for cost of living increases and not likely to last as long as you live. It may be more easily portable.

 

As part of your overall compensation the employer invests deferred wages for you into a professionally managed pension fund. Your retirement income is not dependent on the market but calculated by a formula based on your highest annual income, years of UC service and age at retirement. You and the employer pay a set amount into the plan. You don’t know what your retirement income is until your know how much you’ve been able to save, and how the markets have affected your investment.

 

UPTE believes you deserve the protection UCRP provides and invites you to join in the fight for UC employees to keep the UCRP strong and enjoy a financially secure retirement.

  • Sign UPTE’s union authorization card
  • Talk to your student services colleagues
  • Contact us for more information on pensions, improving working conditions and pay issues.
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