Uc Announces Novel Pension Rates
Saturday, August 9, 2008
Edit
At the adjacent UC Regents meeting, the Office of the President volition inquire the Regents to endorse novel pension contribution rates. According to this proposal, starting inwards July 2013, electrical flow employees volition pay 6.5% of their salary into UCRS, together with the UC volition lay inwards 12%. For people hired on or later July 1 2013, they volition pay 7%, patch the UC volition pay 12%. Of course, these changes volition convey to endure negotiated for represented employees.
One interesting facial expression of this is that the academy has decided to contribute 12% for the people inwards both the novel together with onetime plan. This way that patch people inwards the novel excogitation volition have a reduced benefit, the academy does non convey an immediate incentive to burn electrical flow workers together with supervene upon them alongside novel hires, which oft happens when a novel pension tier requires a lower employer contribution. However, over time, the people inwards the novel arrangement volition toll the academy less.
Ultimately, novel hires volition endure paying to a greater extent than together with getting less, together with this inequality volition assist to trim down the university’s long-term liability. Moreover, for the adjacent iii years, much of the increased contributions from employees may endure matched alongside novel salary increases, together with and thus the academy volition non increment its revenue from these changes. In fact, the motion to a 12% employer contribution coupled alongside a 3% salary increment this twelvemonth together with a possible additional 3% adjacent twelvemonth volition hateful that the UC volition reckon its compensation costs increment past times 11% inwards the adjacent ii years (the UC currently contributes 5% to the pension plan). The long-term excogitation is to increment the employer contribution past times 1% each twelvemonth until they hit 16%.
Once the UC starts paying 16% of covered compensation, it volition toll the academy over $1 billion a twelvemonth to fund the normal toll of the pension plan. Furthermore, the UC yet has to bargain alongside escalating retiree healthcare costs together with the fact that the patch yet does non contribute to the pension plan. I predict that the academy volition attempt savings past times continuing to shift to a greater extent than of the toll for healthcare together with retiree healthcare to the employees. Without a pregnant alter to recent healthcare legislation, workers within together with exterior of the academy volition transcend away along to reckon their full compensation decrease.
One interesting facial expression of this is that the academy has decided to contribute 12% for the people inwards both the novel together with onetime plan. This way that patch people inwards the novel excogitation volition have a reduced benefit, the academy does non convey an immediate incentive to burn electrical flow workers together with supervene upon them alongside novel hires, which oft happens when a novel pension tier requires a lower employer contribution. However, over time, the people inwards the novel arrangement volition toll the academy less.
Ultimately, novel hires volition endure paying to a greater extent than together with getting less, together with this inequality volition assist to trim down the university’s long-term liability. Moreover, for the adjacent iii years, much of the increased contributions from employees may endure matched alongside novel salary increases, together with and thus the academy volition non increment its revenue from these changes. In fact, the motion to a 12% employer contribution coupled alongside a 3% salary increment this twelvemonth together with a possible additional 3% adjacent twelvemonth volition hateful that the UC volition reckon its compensation costs increment past times 11% inwards the adjacent ii years (the UC currently contributes 5% to the pension plan). The long-term excogitation is to increment the employer contribution past times 1% each twelvemonth until they hit 16%.
Once the UC starts paying 16% of covered compensation, it volition toll the academy over $1 billion a twelvemonth to fund the normal toll of the pension plan. Furthermore, the UC yet has to bargain alongside escalating retiree healthcare costs together with the fact that the patch yet does non contribute to the pension plan. I predict that the academy volition attempt savings past times continuing to shift to a greater extent than of the toll for healthcare together with retiree healthcare to the employees. Without a pregnant alter to recent healthcare legislation, workers within together with exterior of the academy volition transcend away along to reckon their full compensation decrease.