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UPTE working to strengthen retiree health benefits

During last year’s bargaining for UPTE-CWA’s researcher (RX), technical (TX), and health care professional (HX) contracts, the union won major victories on pensions and retiree health benefits.

“We preserved equal UC pension benefits for all UPTE-represented workers,” said UPTE’s president, Jelger Kalmijn, “whereas non-union new hires had their pensions pushed back by 5 years.”

ucsf
UPTE members at UCSF demonstrating in support of last year’s bargaining. Diane Powe, photo

The union also eliminated UC’s highly unpopular “Rule of 50,” which would have set back equal retiree health benefits for half of our members by 15 years. This victory was later extended to non-union employees (see <upte.org/pension-victories>).

“In addition,” said Kalmijn, “We secured the right to bargain for equal retiree health benefits for future employees in 2015.”

That last point is important. UPTE-CWA can bargain so that those hired after January 2014 will not have their retiree health benefits postponed by 15 years. Instead of receiving full benefits after 20 years of service at age 50, these employees will have to wait 15 years to age 65 – unless the union bargains a different agreement.

In short, if you are one of these employees, even though you have the right to retire at age 55, you will have very expensive health benefits. You likely won’t be able to afford to retire, or if you do, you could be without health care. “If you were hired after January 2014, your retiree health benefits will cost up to $1,000 per month until you turn 65,” said UPTE’s executive vice president, Mercedes Garcia-Mohr. “For the average UC retiree, this amounts to most of our pension.”

Worse yet, if you retire before age 65 and do not opt to pay the $1000 per month, you will never have access to UC retiree health benefits. You have to sign up for the retiree health benefits within 120 days of leaving the university.

Retiree health benefits may cost more than you think

Retiree health benefits are a crucial part of UC employees’ compensation. But you may be surprised by how much they cost you. Everyone’s situation is different, but here are some factors.

• How many years did you work at UC? If you have 14 years of service, UC plans to pay up to 70% of your premium. Premiums vary by plan, ranging from $700 to $1500. With 10 years of service, UC will only pay 35% of the premium. There is a sliding scale of what UC will pay for 10 to 20 years of service.

• When were you hired? If you were hired after 12/20/2013, you only get the 70% employer contribution if you retire at age 65. There is a sliding scale from 55 to 65. If you were hired before 12/20/2013, you need only be over 50 to get the employer contribution, with a sliding scale dependent on your years of service.

• How many doctors’ visits and medications do you need? The co-pays are generally $20 for both on most plans, and some plans require you to pay a percentage of costs up to $1500 annually.

While those hired prior to January 2014 will not be directly impacted by UC’s changes, the university would like to avoid providing retiree health benefits for anyone prior to age 65. If UC forces this plan on some employees, it will have less resistance applying it to the rest of us. So it’s in our collective interest to negotiate a better deal.

UPTE begins bargaining to establish a Retiree Health Benefits Trust Fund in January (see story at left). Putting money in a fund that makes investment income is the best guarantee for preserving affordable retiree health benefits.

The union has been gathering bargaining surveys that collect employees’ thoughts about all of these issues, so that UPTE’s elected bargaining team will know your priorities in bargaining. If you’ve not yet filled one out, contact your UPTE local. Keep your eyes open for bargaining conferences to give your input as well, and check out the Frequently Asked Questions below.

 

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