In an effort to mitigate this year's salary shortfall, 91¿´Æ¬ Regents voted last month to approve a modified deferred compensation program that will give all eligible employees additional financial reward by way of a special retirement account.
The special account, called a Capital Accumulation Provision, will be available to all eligible 91¿´Æ¬ employees who are members of the 91¿´Æ¬ Retirement Plan. The CAP being proposed will put the equivalent of 3 percent of the employee's salary into a separate retirement account in 91¿´Æ¬RP where it will earn a specified rate of interest (currently 7.5 percent) until the employee begins to draw on retirement funds.
This is not the first time 91¿´Æ¬ has offered employees a CAP program. In the 1990s, when the state's budget was also under severe pressure, eligible employees received CAPs to offset disappointing salary increases. During the last 10 years, 91¿´Æ¬ has offered five separate CAP programs. Below are several actual employee examples from 1993:
Annual employee salary: $35,000
CAP Credit: 2.5% of salary
Interest Rate: 8.5%
Total amount earned to date: $1,727
Annual employee salary: $65,000
CAP Credit: 2.5% of salary
Interest Rate:8.5%
Total amount earned to date:$3,212
Annual employee salary:$100,000
CAP Credit:2.5% of salary
Interest Rate:8.5%
Total amount earned to date:$4,935
To be eligible to receive the CAP accrual credit, employees must be active 91¿´Æ¬RP members on April 1, 2002. This would include 91¿´Æ¬RP members on sabbatical or approved leave of absence. Disabled, retired and inactive members would be excluded.
For more campus budget information, see http://www.news.ucdavis.edu/budget/.
Media Resources
Amy Agronis, Dateline, (530) 752-1932, abagronis@ucdavis.edu