UC Leaders Reject Executives' Pension Demands

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UC President Mark Yudof and Chair of the UC Board of Regents Russell Gould issued a joint statement Tuesday rejecting the demands set forth in a letter signed by 36 university executives who are threatening to sue if a policy that would increase pensions for the university's highest-paid employees is not implemented.

The executives' letter to the regents on Dec. 9 demanded the enactment of a 1999 proposal that would eliminate a cap on the size of pensions allotted to employees earning upwards of $245,000. The letter came in response to Yudof's intent to recommend to the regents at a Dec. 13 meeting that the proposal, known as Appendix E, should be scrapped in light of the university's recent financial woes.

Yudof and Gould argued that the 1999 proposal was not binding without the preliminary step of developing an implementation plan for the policy. They cited "reasons of fiscal prudence in a changing economy" as why such a plan was never submitted over the past decade.

However, the executives' letter referenced regents bylaw 16.11 - which states that any move to reconsider an action taken by the regents must be "made and voted upon at the same meeting at which said action is taken" - as evidence that the proposal to lift the cap on pensions is a binding policy.

The 1999 measure allowed for executives' pensions to be calculated as a percentage of their total salary pending an agreement from the Internal Revenue Service to eliminate the $245,000 cap. Although the IRS lifted the cap in 2007, the measure was never enacted. Now, the executives are calling for its implementation - both for employees retiring now, and for those who have retired since 2007.

In the 13 page letter and position paper, the executives - including Christopher Edley, dean of the UC Berkeley School of Law, and Richard Lyons, dean of the Haas School of Business - outlined what they called the university's "legal, moral, and ethical obligation" to implement Appendix E.

"Failure to do so," the executives warned, "will likely result in a costly and unsuccessful legal confrontation, while undermining the University's reputation as a trusted and good-faith employer."

In response to the executives' threat to sue, Yudof and Gould's statement also unveiled that months ago the regents had "retained counsel to assist the University in the event this position should need to be defended in the courts."

After receiving the executives' letter, Yudof forwarded it to the regents and removed his recommendation from the Dec. 13 meeting agenda, "to allow for further review by the regents," according to Steve Montiel, a UC spokesperson.

However, the executives' letter was leaked to The San Francisco Chronicle, unleashing a wave of outrage in the university community, manifested in a petition against the executives' demands and co-sponsored by the Berkeley Faculty Association and SAVE the University which has thus far garnered nearly 1,000 signatures.

"I think it's pretty outrageous that these high-paid senior leaders of a public institution - at a time when everyone else is taking a pay cut - are demanding higher compensation for themselves," said Daniel Simmons, chair of the UC Academic Senate and professor of law at UC Davis.

The university "already has a $21 billion unfunded liability for its retiree health and pension benefits," and that number is projected to grow to $40 billion within the next five years, according to the UC Retirement Benefits website. Montiel said he could not yet confirm how much the expansion of the pensions for the university's executives would cost. However, the executives' position paper counted "more than 200 senior faculty and executives affected by this matter" and estimated costs to be in the millions.

Since Yudof removed his recommendation to eliminate the proposal from the agenda for the December regents' meeting, the matter will remain undecided at least until the board reconvenes for their meeting in January.

Nevertheless, the debate continues to play out in campus faculty organizations and media outlets across the state.

"The message that (the executives' letter) sends to the people of California is that this group cares more about feathering their nest than the real pain that people in the UC feel," said Gregory Levine, UC Berkeley associate professor of art history and a member of SAVE the University.

Tags: UC PRESIDENT MARK YUDOF, RICHARD LYONS, UC ACADEMIC SENATE, , CHRISTOPHER EDLEY, SAVE THE UNIVERSITY, RUSSELL GOULD, PENSIONS, BERKELEY FACULTY ASSOCIATION, STEVE MONTIEL


Nina Brown covers higher education. Contact her at [email protected]



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