Regents to decide on salary plan
by Cynthia lee
today staff writer
The Board of Regents will decide in November whether to adopt the goal of raising the salaries of UC faculty and staff over 10 years to market-competitive levels.
According to a study done by Mercer Consulting, an authority in the field of employee compensation and benefits hired by UC, salaries now lag behind the market median by an average of 15%. The proposal, which the regents’ finance committee endorsed Sept. 22 and sent to the regents for discussion and action, calls for systematically increasing salaries over a decade, from 2006-07 through 2015-16, until they reach comparable market levels for all groups of employees. According to the Mercer report, the cost of achieving this could be $2.5 billion.
“The bottom line is that we are facing a massive challenge to maintain quality and pay competitive salaries throughout the university, from service employees to faculty to senior leadership,” said Regent Judith L. Hopkinson, the leading regent behind the recommendation and a member of an advisory group on universitywide compensation that is pushing for the plan. “We need to find all available sources of funding to bring salaries to market.”
The study found that overall, when the entire package of UC cash compensation and benefits is evaluated together, the total “is close to the market median value,” the report pointed out. UC’s active health and welfare benefits exceed the market median value by 10% overall. Retirement and retiree medical benefits exceed it by 63%. “The UC is among the few institutions continuing to offer a robust retirement plan and the full continuation of health insurances into retirement,” the report said.
But it’s anticipated that the value of these benefits will be reduced significantly over the next few years, according to the report. A rise in healthcare costs, for example, will likely exceed the percent of increase in salaries in the coming years as well as the UC’s ability to offset them. And while employees have not had to contribute to the retirement plan since November 1990, “employer and employees are expected to contribute within two to three years.”
Another proposal endorsed by the finance committee would place the salaries of senior-level managers into specific salary bands to help ensure that the procedures for determining and setting compensation levels for senior leaders are clear, comprehensive and accountable.
A third proposal that the Finance Committee agreed should come back to it for further consideration involved using private funds from donors to help achieve market parity over the next decade for 42 senior leadership positions. If their annual salaries exceed $350,000 (seven UC positions do currently), the proposal would allow private funds to make up the difference.
“I am driven and motivated to try and get the salaries of all our employees up to market,” said President Robert C. Dynes. But he added that he is “not in a lickety-split hurry to get this in place. This is a huge change in the way we deal with compensation. ... I’m in favor of bringing it up on the table so that it can be openly debated and discussed.”
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