UC Raises Retirement Age For University Employees

SAN FRANCISCO (AP) -- The next generation of University of California employees could have to work longer to receive pensions and other retirement benefits.

The UC Board of Regents on Monday approved a plan that raises the retirement age for future university employees and requires retirees to pay more for their health care benefits.

KCBS' Anna Duckworth Reports:

Many of the changes must still be negotiated with the university's 28 employee unions, which have been critical of the reforms.

University officials said the changes are needed to address an estimated $21 billion unfunded liability in its retiree health and pension programs.

With no action, the ballooning costs of those benefits could threaten the university's ability to educate students and conduct research, officials said.

"We're facing up to reality," said board Chairman Russell Gould. "We've got to reduce our benefits structure in order to make it sustainable. It's a hard decision, but it's a decision for the long-term future of the university."

The plan would increase the minimum retirement age for employees hired on or after July 1, 2013 from 50 to 55. It also raises the age to receive maximum pension benefits from 60 to 65.

The retirement age would not change for current employees, but they will have to contribute more of their paychecks toward their pensions under a plan approved by the regents in September.

The pension reforms are aimed at shoring up the UC Retirement Plan, which faces unfunded liability after a 20-year period when it did not receive contributions from employees, the university or state.

Under the plan approved Monday, current and future retirees would pay a larger share of premiums for their health care insurance, with the university reducing its contribution over time. The plan also raises the age at which future retirees are eligible for those benefits.

Union representatives say raising the retirement age will disproportionately hurt low-paid employees such as custodians and hospital workers with physically demanding jobs that could prevent them from working until 65.

"My job helping patients at UCSD Medical Center requires me to be on my feet all day lifting patients. I doubt I will be able to do this at 65," said Mike Avant. "I don't expect to get rich when I retire, but I also don't want to have to rely on public assistance to make ends meet."

Richard Walker, a UC Berkeley geography professor who is vice-chair of the Berkeley Faculty Association, said changes to the pension plan amount to a pay cut for faculty and staff that could hurt efforts to recruit and retain employees.

He said the university should not underestimate "how important this excellent benefit plan has been over the years in recruiting professors and high-level faculty to the university."

University officials say UC is one of only a handful of public university systems that still offer pensions and retiree health care benefits. But they acknowledged that benefit reductions could hurt recruitment and retainment.

"Over the long run, we cannot run this place at this level without having more competitive faculty and staff salaries because this is a de-facto pay cut," UC President Mark Yudof said.

The board also endorsed a report released last week by the UC Commission on the Future that offers 20 strategies to navigate an era of rising costs and reduced state funding. Two regents voted against the move, citing concern over a recommendation to increase enrollment of out-of-state students.

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