The 36 executives who threatened to sue the UC system for higher pension benefits are now facing opposition not only from the UC Office of the President, but also from a new bill to cap pensions.

UC President Mark G. Yudof rejected the executives’ demands in a Jan. 4 statement, saying that the UC system is not obligated to provide higher pension payments because of a proposal made 10 years ago.

If the proposal was approved, there would be higher pension benefits if a 2007 federal tax waiver was applied, granting executives payments of $300,000 or higher. But the UC Board of Regents continued with the proposal because of “fiscal prudence in a changing economy,” the statement said.

The executives were also rebuked by California State Assembly Member Jerry Hill (D-San  Mateo), who introduced a bill on Jan. 7 to cap pensions for highly paid public executives under the California Public Employees’ Retirement System program, affecting more than 1.6 million public employees.

“I’m offended that UC executives making over $200,000 a year should expect that they get a retirement from the UC system that would cost $51 million,” Hill said. “[But I also] I find it offensive that any employee would put their personal greed above the interests of their students.”

With AB 89, all California public employees would receive a maximum of $245,000 in pensions to match the federal limit. Currently, the state calculates pensions by using a percentage of the average of an employee’s last three years of pay. An employee who has worked for 30 years can earn a maximum pension of $183,750, according to the San Diego Union-Tribune.

The executives asked for the pension raise in 1999 and were granted the waiver in 2007 to lift the $245,000 cap for tax-exempt institutions like the UC system. But, due to the state budget crisis,  the increase was not realized.

If authorized, the desired pension payments would cost $5.5 million a year, in addition to a required $51 million to make the increases retroactive to 2007, when the cap was granted.

UCOP spokesperson Steve Montiel said UC leaders are prepared to defend their decision in court if the executives sue.

“The University of California is taking the right approach in tough economic times,” Montiel said.

But he also sympathized with the executives.

“It is an honest disagreement with 36 highly valued employees who care deeply about the university and its mission,” Montiel said. “The 36 have been unfairly demonized.”

Involved in the ordeal are UCSD five executives, including School of Medicine Dean David Brenner, Vice Chancellor of Resource Management and Planning Gary Matthews and UCSD Medical Center CEO and Health System Associate Vice Chancellor Tom Jackiewicz. These employees currently earn upwards of $220,000 a year, with David Brenner earning the most among the five at $755,897 in 2009.

“We compete for talent with public and private universities,” Montiel said. “The budget may hinder our ability to attract top talent, because there is a limited supply.”

The aforementioned executives could not be reached for comment or declined to speak on the matter.

“We have no comment on this issue, as it’s a personnel issue between these individuals and the UC Office of the President [and] Board of Regents,” Health Sciences Media Relations Director Debra Kain said in an e-mail.

Another office responded similarly.

“We will not respond because it is a personnel and a personal issue,” Tom Jackiewicz’s office said.

Hill, a UC Berkeley graduate, explained why he created the bill.

“I do what I can to support the good work that the UC system has been doing,” Hill said. “Sadly, with a $28 billion deficit, it will be difficult to provide increased funding for UC or for education, which highlights the fact that we should not be paying increased pension benefits to highly-paid UC executives.”