Public Comment

UC Pension Proposal Boosts Executive Payouts, Targets Low-Wage Workers for Cuts

By Lakesha Harrison, President of University of California Employees AFSCME 3299
Wednesday October 13, 2010 - 11:24:00 AM

Californians are tired of University of California President Mark Yudof saying one thing but doing another. Yudof has spearheaded a drive to hike tuition on students struggling to pay their room and board while spending lavishly on his own housing. He has forced furloughs and reductions on the lowest-paid staff while he hauls down an outsized salary and bevy of perks of close to $1 million annually.  

Now Yudof has declared that in fixing UC’s beleaguered pension system, “Retirement programs and policies must treat all faculty and staff equitably, [1] ” even as his pension team appointees propose to hike pension payouts to UC’s highest paid executives while cutting retirement benefits for low- and middle-income workers. 

As the San Francisco Chronicle has reported, shortfalls in the pension system were created when the university stopped contributing to its employees’ retirement account twenty years ago. UC’s Board of Regents met this week to hear recommendations to shore up the pension system. But what Yudof’s hand-picked pension panel didn’t want to tell the public is that the “solutions” they propose would protect or boost retirement income for those earning $180,000 and above while cutting retirement income for the UC custodians, food servers, and parking attendants least likely to have additional retirement savings. The task force’s unfair proposals come as the public is again questioning Yudof’s priorities. A New York Times/Bay Citizen report just raised new questions over Yudof’s wasteful spending on a $13,000 per month rental mansion and his use of University top officials to manage the relationship with his landlord at taxpayer expense. 


Yudof’s pension panel proposal would slash the meager retirement earnings of workers whose low salaries barely pay to keep a roof over their family’s heads.  

Yolanda Lopez, a senior custodian UC Santa Cruz, is the kind of employee UC’s task force proposals unfairly target. At 63 years old, Yolanda cleans dorms. After working 20 years at UC and raising three children as a single mother, Yolanda is ready to retire soon and spend more time with her grandchildren.  

Under UC’s current pension formula, Yolanda will receive about $1,500 a month from UC after she retires. It’s not enough to pay for anything but the basics, but with social security checks beginning after she turns 65, she’ll have just enough to get by. 

The Yudof Task Force wants the UC Regents to make retirement cuts that would drastically reduce retirement income for workers who begin at UC after 2013. 

Under Yudof’s plan, when a worker who comes to UC in a few years retires at 63 after 20 years like Yolanda, that person would only receive about $773 per month, less than half of Yolanda’s retirement income under the old plan. 

Stunningly, at the same time that UC claims it needs to cut retirement costs, one Task Force proposal would actually increase retirement income by as much as 47% for 200 highly compensated UC executives earning over $245,000.  

What’s more, cutting benefits for new workers, as the Yudof panel suggests, does not address the pension fund’s most critical problem – meeting the current gap between inputs and outflows. That’s because savings would only be realized when the wave of newly hired workers retires – a gap of about 15 years.  

Low-wage workers represented by AFSCME Local 3299 believe cutting benefits does not address the primary issue: keeping the UC pension adequately funded. The UC fund’s pension funding gap should be addressed by UC resuming the level of retirement contributions it paid up until 1990 when it took a 20-year holiday from paying any contributions. 

Restoring contributions in 2011 at pre-1990 levels – to be shared between UC and its employees through the collective bargaining process – would restore the pension to health.  

Restoring public trust in the UC means Yudof must take responsibility for keeping UC’s promise of a dignified retirement for the hard-working employees who dedicated their lives to making UC the best university in the world.