UPTE Member Bulletin--Special State Budget Update 
May 15, 2015
UC State Budget Deal Guts Our Pension!
The headlines indicate that UC will receive an additional $500 million over the next two years, of which most will be used to pay the state’s portion of our pension contribution. There will be no in-state student fee increases for two years and after that the increases will be only the rate of inflation. That sounds great, until you read to the fine print.

The governor wants to cap pensionable income at the same level as state employees: $117,000. Over 1000 UPTE members make more than this per year. Capping pensions will have a major impact on their retirement income. UPTE will work with nurses and faculty, many of whom also make more than this cap, to preserve our retirement income.

Worse yet, UC wants to encourage new employees to opt out of the pension plan and take a 401K style retirement savings plan!

This is bad for employees, bad for UC and for all of California! Why?

  • A retirement savings plan only yields half the benefit of a pension plan
  • A retirement savings plan puts all the risk of market volatility and living “too long” on the employees instead of averaging it out over everyone in the pension plan
  • If many employees opt out of the pension plan, this will mean less funds for the pension plan making it more difficult to cover liabilities
  • Having divided retirement plans will divide our membership
  • A pension plan encourages long-term employment where as a retirement savings plan allows excellent employees to leave with the retirement savings paid for by UC.

In short, this proposal cuts our pension much more than the previous 5 year push back that we defeated.

We are paying 9% of salary for an excellent pension, we will fight UC if they propose to undermine our pension with a retirement savings plan.

Stay tuned for additional updates as we get more information about this very harmful proposal.

The UPTE E-Bulletin is prepared by UPTE-CWA President Jelger Kalmijn. If you have any questions or comments, please do not hesitate to write him at president@upte-cwa.org.