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Davis, California

Wednesday, May 22, 2024

Editorial: UC pension contributions

At a dramatic meeting temporarily interrupted by angry demonstrators, the UC Board of Regents voted last month to increase contributions to the system that pays pensions to retired UC employees.

Currently, 2 percent of each UC employee’s salary is withheld and put into the pension fund. Next July, that number will rise to 3.5 percent, and a year after that it will increase to 7 percent. As the employer, the university will also increase its own contributions to the fund: 4 percent in July 2011 and 10 percent in July 2012. Overall, the total level of contributions to the fund will increase by more than 20 percent.

This decision is long overdue. The health and pension funds face an unfunded liability of $21 billion. If the regents hadn’t taken this action, the unfunded liability could have skyrocketed to $40 billion in fewer than five years. While UC employees managed to get away for 20 years without having to contribute anything to the pension system, times have changed.

There is no question that this decision amounts a pay cut for university employees. Labor leaders and activists are correct in pointing out that the increased take-away from employee paychecks will have a greater impact on lower paid employees than on others. Yet it’s clear that without these changes, it’s likely that employees wouldn’t receive a proper pension when they retire.

In an ideal world, UC would be able to limit the impact on low-wage workers by soliciting better retirement funding from the state. The reality, however, is that the state doesn’t even have a budget yet, three months into the fiscal year. In fact, unreliable state support is part of what took the pension fund from a considerable surplus just a few years ago to the massive deficit it faces now. The university’s entire budget is roughly equal to the deficit the pension fund is currently facing – there are few options left to address this problem.

The solution the regents chose will be tough on some workers, but they will benefit in the end.


  1. This editorial does little more than repeat the Regents’ talking points. The pension dilemma is a direct result of decisions taken by the Regents themselves and is certainly not the fault of workers who “managed to get away for 20 years without having to contribute.” These contributions were ended by the Regents themselves, who now find it more convenient to correct their predecessors’ mistake on the backs of UC employees. There is plenty of intelligent criticism of the Regents’ decision –here, for example: http://changinguniversities.blogspot.com/2010/09/pensions-lies-and-videotape-employees.html . Anyone willing to take the time to investigate–as the Aggie was apparently unwilling to do–will see that there are other alternatives that the Regents didn’t want to consider.


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