Reporting from San Francisco — As the University of California seeks to fill a potential $21-billion gap in its pension and retirement health plans, labor leaders Wednesday alleged that lower-income employees would unfairly feel the brunt of proposed changes in benefits and contribution levels.
"How can the university continue to attract students and be a renowned institution of higher learning when it permits what in essence is pay and pension discrimination?" Rome Aloise, a Teamsters union official, asked the UC regents at a meeting in San Francisco. More than 14,000 UC clerical and support staff workers are organized with a Teamsters local and have been without a contract for two years.
The regents Thursday are expected to approve increases in the amounts employees and the university must pay toward retirement benefits. For employees, the figure is expected to rise over the next two years from the current 2%, to 5% of their paychecks and for the university, from 4% to 10% of payroll. Until this year, neither side had made any payments for 20 years, turning what had once been an over-funded system into one with potentially huge deficits.
Some union leaders said it would be hard to agree to such increases without pay raises.
Even more contentious are several complicated overhaul proposals the regents are scheduled to review by year's end. Among ideas recommended by a task force are raising the minimum retirement age from 50 to 55 and creating a new tier of benefits for employees who are hired after July 2013. In another possible change, Social Security benefits might figure into the calculations as well.
Unions contend that some of the proposals could disproportionately hurt lower-wage and blue-collar workers. Part of the problem, they say, is that full Social Security benefits don't kick in until age 65 but employees with physically demanding jobs tend to retire earlier than professors.
Instead of a two-tier system, most employees would agree to move immediately to a 5% contribution if UC increased its payments to 12% of payroll, said Bob Samuels, a UCLA lecturer and president of UC-American Federation of Teachers, which represents more than 4,000 lecturers and librarians. More attention also should be paid to how pension funds are invested, with more oversight by employees, he said.
UC President Mark G. Yudof said that he is studying several pension reform proposals and that he hopes to hear suggestions from labor groups before he makes a formal proposal in November. "A lot of variables may be shifted around," Yudof said. "But we do need to do something. That is clear. And my test is: Is it sustainable over time and is it fair to all the employees?"