UC Says: Facts Vs. Reality

HX Bargaining, San Diego

The UC Administration Is Lying To You About Your Pension. UPTE Is Fighting Back.

UC Says: “FACT:” UC is not taking away or changing your pension.

Employees in the UC Retirement Plan (UCRP) can be assured their pension benefits aren’t going away or changing. UC’s addition of a 401(k)-style benefit option for future employees does not affect the pension benefits of current employees.”

REALITY: The addition of the 401(k) style plan will undermine your pension.

What UC is proposing now will not alter benefits for those in the pension system. However, it will increase the cost of the pension by removing a significant block of younger workers from making contributions. Legislation has been repeatedly introduced[1] by both Democrats and Republicans to both eliminate cost of living adjustments for retirees and to force people already in pensions into a 401(k)-style plan. What UC is proposing is the first step to getting rid of our pensions altogether.

UC Says: “FACT:” UC is not eliminating pension benefits.

UC has been offering pension benefits for over 100 years. They are a valuable employee benefit and UC has no plans to stop offering them.” 

REALITY: The “opt-out” is about eliminating pension benefits.

UC will exploit new employees’ lack of knowledge about pensions–due to a 40-year attack on pensions in the private sector–to convince them to join the 401(k) style plan. Once workers are  in the 401(k) plan, they can never join the defined-benefit plan without starting from scratch. Actuaries hired by AFSCME 3299 have found that retiree benefits will be about half for the 401(k)-style plan for the typical UC represented worker. That’s money UC workers will never get back if we agree to the “opt-out.”

UC Says: “FACT”: Offering a choice does not threaten UC’s pension plan.

Some claim that offering new employees a 401(k)-style option puts UC pension benefits at risk. This is completely false. The financial health of UC’s pension plan, and UC’s ability to pay pension benefits, is fundamentally determined by UC’s contributions to the plan and the plan’s investment performance, not which retirement benefit option new employees choose.

REALITY: Pensions are not just about finances. They are also about politics.

UPTE, CNA and AFSCME worked in coalition last contract fight to stave off UC’s attempt to create an inferior pension tier. Had we let UC cut pension benefits for those hired after 2013, would they stand with us in solidarity to defend the pension in the same way that they are today?

That solidarity will be undermined even further in our next round of contract negotiations if we accept the ‘choice’ between that same inferior pension tier and a 401k. Billionaires have spent tens of millions of dollars attacking our pensions over the past decade and there have been multiple efforts to pass ballot initiatives, led by former San Jose Mayor Chuck Reed that would eliminate much of the legal basis for the inviolability of our pensions. By attempting to undermine our unity, UC is absolutely threatening our pensions.

UC Says: “FACT”: Choice of retirement benefits helps more employees.

401(k)-style retirement benefits are very common these days. In 2016, UC added the choice of a 401(k)-style option for new employees, since many employees don’t spend their entire career at UC and appreciate having a portable retirement benefit. Offering new employees a choice between a traditional pension or a 401(k)-style plan allows UC to support a broader range of employee needs.

REALITY: 401(k)s do not provide a secure retirement. Only pensions do.

401(k)s were designed in the ‘70s as a supplement to a pension.  They were never designed to provide a comprehensive retirement. That’s why actuaries have found that the “Savings Choice” plan will provide about half of the assets in retirement as the tradition pension will. Fewer and fewer Americans have pensions, so there is less understanding of how important they are. That’s why the National Institute on Retirement Security has found that over 1.7 million households would be pushed into poverty without income from their defined-benefit pension.[2] Having a pension also helps attract and retain employees at UC. It is one of the best recruitment tools that UC has.

UC Says: “FACT”: Other UC unions have agreed to UC’s choice program.

Unions representing UC clerical employees, lecturers, librarians and campus physicians have all agreed to UC’s retirement choice program for their members.

REALITY: The unions only agreed in the face of unrelenting pressure from UC.

The administration is absolutely obsessed with destabilizing our pension because it will undermine union power at the University–giving the administration free reign to do things like hiding $175 million from the public, as an audit of the President’s office found last year. UC’s unions were instrumental in getting the audit to happen. Weak unions mean weak oversight of the UC administration. UPTE, CNA and AFSCME agreed to a union modified tier in 2014. We have a different (and better) benefit. None of us have agreed to the 401(k)-style plan. There is a precedent for these unions to work together and fight (and win) to beat back UC’s cuts to members’ benefits. We won in 2014, and will win in 2018 and 2019 as well.

[1] “Cost-of-living adjustments for California state worker pensions are safe, for now.” Adam Ashton, Sacramento Bee. April 24, 2018.

[2]The Pension Factor: Assessing the Role of Defined Benefit Plans in Reducing Elder Hardships.” National Institute on Retirement Security. July 2009.