Archived entries for UC Retirement Plan (UC Pension)

November 8, 2010

Can you explain what is meant by not subsidizing survivor benefits?

Yes. For the proposed new pension tier for future employees, survivor benefit subsidies is one of several modifications to the current pension program that could affect future employees. These future UCRP members would still have the option of providing benefits to their survivors by choosing a reduced pension benefit to cover the cost.

This proposed change, if adopted by the Regents, will not affect the survivor benefits of current UC Retirement Plan members, including faculty, staff and retirees. Read more…

August 25, 2010

Q&A: The forum presentation mentioned that current employees with a certain age and years of service could be grandfathered under the current plan and not have a change. The figures quoted were age 40 and 10 years of service. Are these the figures going forward as a recommendation from the task force?

Grandfathering provisions for eligibility for retiree health insurance are among the task force recommendations in order to mitigate the impact of proposed changes on those employees who are near retirement.  The recommended formula for a grandfathering provision is age plus service greater than or equal to 50 for employees with at least five years of service.

August 25, 2010

Q&A: Will people who have already retired lose their benefits? Would it be safer to retire now in order to avoid the risk of losing benefits if retirement is delayed?

UC intends to continue to offer competitive pension and retiree health benefits.  Current employees and retirees have a vested right to their accrued pension benefits and these may not be changed.  UC does reserve the right, however, to change pension benefits prospectively, both for current and future employees and to change retirement health benefits for current and future retirees.

August 20, 2010

Q&A: What is the “normal cost” of the UCRP benefits?

The “normal cost” is defined as the annual cost of a member’s benefits earned over his or her career at UC. Currently, the normal cost of UCRP benefits is about 17% of participants’ “covered earnings.”  Both employees and the University share in paying the cost of the UCRP benefits.

August 19, 2010

Q&A: What is UC’s response to the recent Stanford study, California State Pension Funds Going Broke?New calculations by Stanford graduate students show that California’s three main public employee pension funds area in more dire financial trouble than previously believed.

There is no relationship between the study and UC’s pension. The following information clarifies several key points about UC’s pension program.

Of the three pension systems cited in the study, the UC Retirement System (UCRS) has the highest funded ratio (94.8 percent), despite the fact there were no contributions into the UC pension plan from UC employees, the University and the state in nearly 20 years.

  • UC has long recognized the need to protect its pension plan’s long-term well being, and the University is working proactively on several fronts to do just that.
  • Contributions — from both employees and the University — to UC’s retirement plan begin this year and total six percent of annual pay. Contributions levels are expected to rise over time to a level sufficient to achieve a funded ratio of 100 percent.
  • Consistent with required national accounting standards, UC regularly reports its liabilities, including unfunded liabilities for retiree health insurance, in its financial statements.
  • Over the past 20 years, UCRS has had annual average investment returns of 8.7%, exceeding the 7.5% actuarial rate of return.
  • UC’s investment policies are designed to preserve and grow University assets within acceptable levels of risk, as determined by the UC Board of Regents. UC investment policy is reviewed regularly to ensure it supports the intended objectives, and investment performance is publicly reported quarterly and annually.