Retirement plan impacts entire community

By Celeste Langan | Special to the Daily Cal

What’s all the fuss over pensions about? Why should you bother reading about retirement benefits, especially when the proposed changes don’t affect current faculty and staff, whose pensions are secure? Surely there are more important concerns in this age of austerity: Aren’t we expecting the campus to announce budget cuts this month? What about lecturers, custodians and parking attendants seeking a living wage, and students faced with rising fees and food insecurity?

Here’s why it matters: Unless we resist, the UC Office of the President is prepared to institute changes to the way faculty are compensated that will accelerate the privatization of the University of California. In effect, UCOP wants to make the remuneration of faculty and staff more and more dependent on the monoculture of “the market,” thereby undermining the partial protection from economic insecurity upon which the intellectual freedom of academic work depends. Although more subtle, the proposed changes are as much an attack on the principles of academic freedom as Wisconsin’s weakening of tenure protection for its university faculty. These are strong claims, I realize, so let me explain.

Pretty much everyone agrees that the only thing wrong with the current retirement plan for UC employees — UC Retirement Plan, or UCRP — is that both the California state legislature and university stopped making payments to it for 20 years — when investment returns were so robust that regular payments seemed unnecessary — until the financial collapse of 2008. Rather than collaborate on a gradual plan to fix the consequence of these suspended payments, however, Gov. Jerry Brown and UC President Janet Napolitano have privately negotiated a deal that places blame for the problem on the structural foundation of UCRP: defined benefits. The agreement is a bad deal, because it will neither significantly reduce the unfunded liability nor yield significant savings for the university. For that reason it ought to be opposed; we should return the proffered $96 million to the state and retain our current system. But we also need to consider more carefully what’s at stake in the attack on “defined benefit” plans such as the UCRP. While there’s been much criticism of Napolitano’s agreement to the PEPRA cap of $117,000 pensionable salary, that’s not the real issue; UCOP has made clear its intention to supplement benefits for higher-earning faculty and staff. The more fundamental interest — made explicit in the FAQs and other documents about the proposed plans — is to shift “risk” to employees. Even before she had appointed her “Retirement Options Task Force,” Napolitano had announced her intention to introduce a full “defined contribution” plan.

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[Source]: Daily Californian