UC Regents OK Hike in Pension Contributions, Hospital Executive’s Pay
On Thursday, the UC Board of Regents unanimously approved a plan to increase the amount that UC employees and the university system will contribute to workers' pensions and retirement health plans, the Los Angeles Times reports.
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The plan calls for employee contributions to increase over a two-year period from 2% to 5% of their paychecks. During the same period, the university system's contribution will increase from 4% to 10% of its payroll.
About half of the university system's 115,000 workers will experience the changes soon, but negotiations must take place with UC's unionized employees.
Financial Strain for Retirement Fund
Prior to this spring, neither UC nor its employees had contributed to the pension or retirement health plans for 20 years (Gordon, Los Angeles Times, 9/17).
Between 2008 and 2009, UC's $30 billion retirement fund lost 19.2% of its value. Officials said the fund's losses would cost UC about $700 million annually for 15 years (Krupnick, Contra Costa Times, 9/16).
The recently approved changes are part of the university's efforts to close an estimated $21 billion liability gap in its retirement plans (Los Angeles Times, 9/17).
If no changes are made, UC's unfunded obligations for pensions and retiree health care would increase to $40 billion in four years, UC analysts say (Asimov, San Francisco Chronicle, 9/17).
Compensation for UCLA Hospital Executive
Also on Thursday, the regents increased the annual salary of David Feinberg -- CEO of UCLA's hospital system -- by $410,000 to about $1.3 million. About $250,000 of Feinberg's salary increase will come from private donations and the remaining increase will come from hospital revenues, officials said.
UCLA Chancellor Gene Block said Feinberg's raise comes at a time when the executive was performing well and being courted by other potential employers. He said, "Keeping this team together is essential" (Los Angeles Times, 9/17).
Criticism From Employees, Labor Groups
Outside the regents' meeting on Thursday, dozens of unionized UC employees staged a protest, saying that the university's long-term retirement plan changes would reduce their pensions and unfairly benefit highly paid workers (San Francisco Chronicle, 9/17).
Regents also have faced criticism from labor groups over their decision to approve $3.1 million in bonuses for 37 executives at UC medical centers across the state. The awards included a $210,000 bonus for Feinberg.
According to the board, the bonuses are funded by hospital revenue and are linked to improvements in efficiency and patient health outcomes.
In December, the regents are expected to review proposals for additional changes to employee benefits (Los Angeles Times, 9/17).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.