The University of California’s Academic Senate sent a letter to UC President Janet Napolitano rejecting her proposal to restructure retirement benefits last Friday. The proposal aims to generate savings while also maintaining current compensation levels; opponents are concerned with how the plan could reduce the university’s ability to attract and retain quality faculty and staff.

There are two issues in contention. First is the adoption of the the California Public Employees’ Pension Reform Act cap, which would cap faculty salaries at a maximum of $117,000. According to the letter, the cap was adopted with little input from those it would affect most.

“[T]he adoption of the PERPA cap is a fait accompli, leaving [the divisions and committees of the Retirement Options Task Force] with no option but to analyze the options in the context of which might be least harmful to the University,” according to the letter addressed to Napolitano.

The second is the creation of a separate retirement tier for all  university employees hired on or after July 1, 2016.

Professor Emeritus Henry Powell, current President of the UCSD Emeriti Association and the Emeriti Association’s representative to the Academic Senate, explained how the difference between the existing two tiers and the newest proposed tier of the UC Retirement Plan benefits has caused concern over how it will affect faculty and the future of the university itself.

“The problem that my colleagues and I foresee is that with a weaker, less valuable retirement plan, [the University of California] will find it harder to hold onto valuable faculty who get offers from other institutions,” Powell told the UCSD Guardian. “There is a morale problem when you establish different levels of benefits. New people have to work just as hard as the more senior people with better benefits.”

The restructuring of the retirement plan is driven by three goals: to preserve faculty compensation, to continue to pay off the Unfunded Actuarial Accrued Liability to keep the pension system thriving and to generate savings. According to the Retirement Options Task Force, meeting all three of these requirements with the same plan is impossible.

“Only the second goal likely will be achieved … The other two goals are clearly inconsistent; the first cannot be met through the recommendations in the report, and the third is possible only if we understand savings to be logically equivalent to benefits cuts,” the ROTF reported in the letter. “There are no inefficiencies to be exploited in the current plan that would create savings.”

UC Office of the President Media Specialist Rebecca Trounson elaborated on how the plan will take into account the previous year’s budget agreement to maintain a balanced budget for the UC pension system.

“As part of [last year’s budget] agreement [with state leaders], the university agreed that the amount of income that would be used to calculate the pension benefits of future employees would be the same as it is for state workers,” Trounson said. “The new retirement options will help ensure the continued financial health of [University of California]’s pension and the university’s ability to provide retirement benefits for future employees.”

Trounson reiterated that suggestions for improving and changing the plan will be taken into account up until Napolitano submits the final document to the UC Board of Regents in March. Trounson also emphasized the importance of keeping the UC system’s standards high by maintaining competitive rates of compensation for faculty and staff as a key priority.