Protecting Employee Pension Benefits: Update Regarding Restart of Contributions to UCRP -- July 21, 2006
As part of their ongoing efforts to protect future employee pension benefits and ensure the long-term health of the UC Retirement Plan (UCRP), the UC Regents have decided that contributions from both the university and employees will need to be reinstated, beginning as early as July 1, 2007. This will keep the UCRP financially stable for the future and help prevent the problems that many other public pension funds are currently experiencing. The Regents discussed the restart of contributions at their meeting this month, including initial contribution levels for employees.
Highlights of July Regents’ discussion regarding UCRP contributions:
- Contributions will start small and gradually increase in order to help minimize the initial financial impact on employees as well as UC.
- Initial employee contributions are intended to be only the amount employees are now putting into the Defined Contribution Plan -- only about 2% of pay for most employees.
- Consequently, employees will see no loss in take-home pay from the initial restart of contributions, since this amount is currently being deducted. The money will simply be put into the UCRP instead of into the DC Plan.
- Employees will keep any money they already have in the Defined Contribution Plan, and they will still control how it is invested.
- UC will also contribute to the UCRP, in an amount that will be at least equal to what employees are contributing.
- UC is not planning to cut salaries to pay for contributions to the UCRP.
- Reinstatement of UCRP contributions is subject to the availability of funding, the budget process, and collective bargaining for represented employees.
For more information about the restart of contributions and UCRP, go to “The Future of the UC Retirement Plan.”
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“The Future of the UC Retirement Plan” website: (http://www.universityofcalifornia.edu/news/ucrpfuture/welcome.html): The update above is available on this site in three other languages – Spanish, Tagalog, and Chinese. In addition, the site provides all the latest information about UCRP issues, including lengthy questions and answers which are updated regularly, articles pertaining to defined benefits plans industry wide, Regents Items pertaining to UCRP valuation and contribution strategies, the UCRP Annual Report, the factsheet “Why Restarting UCRP Contributions Early Helps Everyone,” and more. Please refer faculty and staff to this site for the most recent information. We encourage departments to provide employees without computers with hard copies.
COMMUNICATIONS COORDINATION IMPORTANT: Because we expect future communications from HR/Benefits to come to the campus, as they have been, through various venues and in various formats, a workgroup is being formed to collaborate on the most effective ways to distribute information to administrators, staff and faculty as it becomes available. The workgroup will be chaired by Benefits Manager Mary De Shaw, and includes representatives from offices which have been receiving these materials such as Academic Personnel, Labor Relations, Public Affairs, the VC Administration’s office, the Budget Office and the Faculty Welfare Committee. The input of Departmental HR Managers will be crucial as we move forward with a long-term strategy for making these communications available.