Pension Bulletin: Wages and Pensions Under Attack!

UC President Yudof’s Task force has just released a plan to make big cuts to our wages and benefits. The report tries to scare workers by saying that if workers don’t take these cuts, the pension is in trouble. The pension will be fine if UC pays its fair share as it did in the past. Here are some report highlights:

How Does It Work Now?

What Yudof’s Task Force Is Proposing?

Pay Cut for the Pension

Currently we pay 2% of our paycheck into our pension.

Ramp up to at least a 7% contribution to the pension by 2013 (that’s 5% more than you are paying now).

Retiree Health Care

Health care is provided to eligible employees after retirement if we work over 10 years and are at least age 50.

The maximum retiree health benefit (at 20 years of service) is that UC pays 89% of the total cost of health insurance and the employee pays the other 11% of the total cost.

Health care would be provided to eligible employees after retirement if we work over 10 years and are at least age 55.

After 20 years, workers can only get the maximum retiree health benefit, where UC pays 89% of the health insurance cost, if workers are 65 years old.

Even worse, UC wants phase in a cut to the maximum benefit. UC wants to only pay 70% of the total cost of insurance and the employee would pay the other 30% of the cost. This means a 20-year employee retiring at 65 would pay at least 3 times more for health care at retirement!

Two Tier Benefits

Currently, almost all employees receive the same benefits.

The minimum retirement age is 50 and employees can receive their maximum benefit at age 60.
Retirement income is based on a formula that takes into account age, years of service, and salary.

AGE FACTOR x YEARS x SALARY = RETIREMENT INCOME

UC wants a new lower tier of benefits for new workers. It will tell current employees who can’t afford a big pay cut for their pension to choose this cheaper second tier. This lower tier of benefits would:

Increase the minimum retirement age to 55 and require retirement at 65 to receive the maximum benefit.
Reduce the credit that workers receive for their age (called age factor). This change in age factor unfairly targets income less than $60,000. Retirement income on earnings less than $60,000 would be cut in half

Executive Retirement Perks

Extra perks for executives, including President Yudof, who will get $350,000/year for the rest of his life after only 7 years at UC!

While claiming the pension is broke, UC’s Task Force has a plan to give high wage employees even more.

WE MUST FIGHT THESE UNNECESSARY CUTS!

These cuts would force low-wage workers onto state assistance and hurt UC’s ability to retain staff.

Making workers pay 7% into the pension without increasing wages would force low-wage workers on to state assistance and drive away hard to recruit staff.
Creating a two-tier pension system is union busting. It drives a wedge between workers and makes it easier for UC to get even bigger cuts later.
Cutting retiree health care is premature – Obama’s health care plan is only now rolling out.

UC executives are proposing these massive cuts to get out of paying their fair share. UC Faculty on the Task Force put out their own report because they said most of UC’s cuts are unnecessary. We must fight for retirement with dignity! Our first steps are to get the right Governor elected and to speak out at the upcoming Regents meeting!