UC Executives Threaten to Sue

Philip Jia/UCSD Guardian

As 2010 drew to a close, the UC system underwent a number of changes to compensate for its loss of state funding. Student fees increased by 32 percent, the UC employee contribution to the retirement fund began after a 20-year break, and UC retiree health benefits decreased, while the age for retirement increased this past month. Now, top-tier UC employees — specifically, those earning more than $245,000 annually ­— have threatened to sue the UC system if they do not receive a promised  increase in retirement payments.

In a letter sent to the UC Board of Regents on Dec. 9, 39 UC executives demanded the higher pension benefits promised to them in 1999 under the condition that the IRS raised the cap on pensions from the previously set $245,000. This cap was raised in 2007. The UC calculates pensions as a percentage of salary, up to a cap of $245,000, while those earning between $245,000 and $500,000 receive $184,000 annually when they retire.

After 2007, executives claimed the promised benefits were never allocated. The increase in benefits would cost the UC system an additional $5.5 million a year in addition to a one-time cost of $51 million to make the change retroactive to 2007.

This threat comes at a time when the UC system faces a  $21 billion deficit in pension obligations, a deficit that nearly matches the current state budget deficit of $25.4 billion.  The pension gap is nearly the same as the university’s annual budget of $20.1 billion for 2009-10.

Furthermore, incoming governor Jerry Brown said Californian public school will face even greater budget cuts, according to San Francisco Gate. In a written statement, Brown criticized the 36 UC executives, calling them out of touch for demanding extra benefits when the state is facing billions of dollars in deficit that strongly affect people far less advantageous.

In the 1980s, the state contributed about 5 percent of its general fund to the university but this share declined to approximately 3.1 percent — about $2.6 billion — by 2009-10. While state funding increased to about $3 billion in 2010-11, funding is predicted to decline further.

The UC system has already begun to reduce its contribution to health care, from the current 89 percent to 70 percent by 2018. For employees hired after July 1, 2013, the age for retirement will increase from 60 to 65.

The UC Commission on the Future was created last year to address the budgetary issues. The committee, co-chaired by UC President Mark G. Yudof and the UC Regents Chairman Russell Gould, released a report last December with recommendations —  20 of which were endorsed.

The recommendations include decreasing the time to earn a degree, increasing out-of-state enrollment from 7 to 10 percent and exploring online instruction through an online course pilot program. According to UCOP spokesperson Ricardo Vazquez, decreasing time-to-degree through pathways such as a three-year degree program or joint bachelors and masters programs would increase undergraduate spots for prospective UC students.

“[Reducing time-to-degree] is likely to be appropriate for only a fraction of UC students, but even if only 5-10 percent of UC undergraduates graduate a quarter or semester early, it would free up 2,000 to 4,000 undergraduate slots per year and increase access to UC for other students coming in,” Vazquez said.

The report also suggested increasing nonresident enrollment to increase geographic diversity and raise money. Additionally, it claimed that increasing nonresident enrollment generates money for the UC system since each out-of-state student pays $21,000 more for tuition a year than California residents.

“California students would not be displaced for out-of-students; they would come on top of California students, not at the expense of California students,“ Vazquez said.

The online classes pilot program will help and generate additional money for UC as well as provide students access to general education requirements that are becoming impacted due to cuts in courses and increased enrollment. The pilot program — projected to start in 2012 and involving up to 25 courses — will run for a year to test its efficacy, according to Vazquez.

Co-chair of the Berkeley Faculty Association Wendy Brown said streamlining degrees and providing online courses would significantly decrease the quality of UC education.

“If you just take those two [streamlined degrees and online education] in combination, you have an education significantly lower in quality, speeded up and [that] loses the dimension of a college education that’s about exploring new ideas [and] opening up new possibilities — and instead, is increasingly designed to crank out degrees and crank out job training,” Brown said.

Other contingency recommendations from the UC Commission on the Future not endorsed by the Regents include decreasing enrollment, reducing faculty and staff in addition to financial aid support.

“These recommendations represent a worst-case scenario,” Vazquez said. “They would have to be considered only if the state budget worsens to that point.”

The Council of UC Faculty Associations President Robert Meister said the unendorsed recommendations should be considered now, not when financial situations worsen.

“The news about the gold commission [report] is that most of the bad things Yudof wanted them to adopt [and] tried to push through were rejected at the Regents, so they kept them as contingency plans just in case is there is another emergency. How predictable is that there’s another emergency?” Meister said. “Jerry Brown has all but said he’s going to cut funding and increase taxes.”