Yudof Picks 'Dissenting' Pension Plan Backed by Faculty

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Two months after being presented with three competing models for the future of the financially troubled UC pension system, UC President Mark Yudof has chosen to adopt a modified version of a faculty-backed plan, according to a letter sent to UC faculty and staff Tuesday.

The letter, posted to Yudof's Facebook page, states he will recommend the modified plan - which will see employees' contributions rise to 7 percent of their total compensation while the university will pay 8.1 percent of employees' salaries into the fund - to the UC Board of Regents at their November meeting with the regents making their final choice at a special meeting in December.

If approved, employees hired after July 2013 would pay the higher contribution rates, would have their minimum retirement age increased by five years to 55 and would no longer have the option of a lump sum cash-out.

Yudof's decision comes after a university task force recommended he adopt one of two possible models for the UC Retirement Plan, which could accumulate $20 billion in unfunded liabilities by 2014 if a new model is not adopted. However, Yudof's choice reflects a modified form of a third option authored by the faculty and staff members of the task force as a "dissenting opinion" to the other two plans.

In a letter sent to UC faculty and staff on Monday, chair of the systemwide Academic Senate Dan Simmons said there was "light at the end of the (post-employment benefits) tunnel," adding that the Academic Council - the administrative arm of the Academic Senate - will meet Wednesday to write a formal response to Yudof.

"It is important to memorialize the Senate's recommendations on the various options presented as a reflection of all of the hard work that has gone into examining those positions," he said in the letter. "I also hope that we will be able to agree on a statement in support of President Yudof's recommendations, along with a recognition that the University needs to focus on competitive remuneration for both faculty and staff."

In the letter, Simmons said he and Robert Anderson, the vice chair of the senate, spoke to "key regents" about Yudof's choice and Simmons said he anticipates "that the President's recommendation will be supported, but of course there is no certainty."

Though the dissenting plan by faculty and staff includes many differences from the two plans recommended by the university, neither letter offers full details regarding aspects of the plan Yudof has chosen, including whether it will be integrated with Social Security. Simmon's letter states that the Academic Council will meet Wednesday to take a position on Yudof's recommendation.

"While the President's decision is taken in advance of a formal expression of opinion on the specifics of the proposal, I hope you all will appreciate the fact that the President has been fully aware of the Senate's views on the various options and that his recommendation is consistent with the positions expressed by almost all Senate agencies in their review of the task force recommendations," Simmons said in the letter.

Javier Panzar is the lead higher education reporter. Contact him at [email protected]

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