Paychecks won’t change initially
BY WENDY SODERBURG
Today Staff Writer
The UC chief of human resources and benefits released more details about the planned restart of contributions to UC’s retirement plan (UCRP), slated to begin July 1, 2007.
While the level of contributions by employees and UC has still not been decided, the regents, meeting in San Francisco July 19-20, heard from Judith Boyette, UC’s associate vice president for human resources and benefits, that UC has no intention of starting employee contributions at 8%.
And whatever the level of contributions, UC will give to the UCRP an amount that will be at least equal to what employees are putting in, she explained. For represented employees, the changes being contemplated will be subject to collective bargaining with their respective unions.
While the total cost of the retirement plan is about 16% of the university’s payroll, employee contributions will start small and gradually increase over time until the sum of UC and employee contributions covers the full 16% cost, Boyette explained.
But many employees may not even notice the difference in their take-home pay, at least initially. Since the suspension of UCRP contributions by employees in 1991, a percentage of their pay — about 2% for most — has been redirected to the Defined Contribution Plan (DC Plan). In the first year when UCRP contributions are restarted, UC will simply redirect employees’ current DC Plan contributions to UCRP — meaning no reduction in take-home pay, Boyette explained.
UC does not plan to cut salaries to pay for contributions to the UCRP, she said. In fact, the regents’ final 2006-07 budget includes an additional 1% funding for salaries and benefits beyond the 3% funding pool for wages and benefits in UC’s budget compact with the governor.
How will this affect UC’s ability to compete for the best employees?
Last year, the regents set a goal of raising UC salaries to levels paid by comparable institutions within the next 10 years. The regents are planning a series of “catch-up” pay increases over the same span of years in which contributions to UCRP will be rising.
“Our goal is to try to minimize the financial impact of restarting contributions on employees as much as possible,” Boyette said.
See www.universityofcalifornia.edu/news/ucrpfuture for details.
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