Changes in retirement plan under state, UC budget garner criticism

By Shreya Maskara

The budget deal signed between University of California President Janet Napolitano and Gov. Jerry Brown in May signifies a change in the retirement plan offered to new employees that faculty members and experts believe will affect the future of the UC system.

Earlier this year, Napolitano appointed a systemwide task force of UC faculty, staff and administrators intended to draft a new set of retirement benefits that will include a lower pension tier and could give future employees the option of shifting from a defined benefits plan to a defined contribution plan.

A defined contribution plan is a retirement plan in which the employer, employee or both, make contributions on a regular basis. In a defined benefit pension plan, an employer or sponsor promises a specified monthly amount based on the employee’s earning history, service and age.

The state promised $436 million in May intended to help reduce the UC’s long-term pension debt of $7.8 billion over a three-year period.

Celeste Langan, a co-chair of the UC Berkeley Faculty Association, said she thinks the state and the UC do not have a good history of keeping their promises. She added she thinks there is no guarantee the UC will receive the rest of the money, because the agreement signed between the two only specifies the one-time $96 million contribution.

For the full article, click on the link below.
[Source]: Daily Bruin