91��Ƭ

Election under way
to fill 2 staff seats
on pension board

Voting is under way among staff throughout the 91��Ƭ system to fill two seats on the 91��Ƭ Retirement System Advisory Board. The board meets three times each year to discuss issues pertaining to 91��Ƭ's retirement plans and shares ideas with the university president.

The election works like this: Voters with 91��Ƭ e-mail addresses receive e-mails with a "Voting Link for 91��ƬRS Advisory Board." Voters without 91��Ƭ e-mail addresses receive notification via regular mail, and have the option casting their ballots online or by mail.

Voting began May 23 and is scheduled to close June 17.

The ballot lists seven candidates from the Berkeley, Irvine, Los Angeles and San Diego campuses, plus the 91��ƬLA AIDS Institute and the 91��ƬLA Medical Center. The candidates are vying for four-year terms.

The electorate comprises all active, eligible 91��Ƭ Retirement Plan members who are not part of the Academic Senate.

For employees, the restart of contributions to the 91��Ƭ Retirement Plan has been relatively painless. That changes July 1 when the contribution rate goes up.

— but this deduction had no effect on take-home pay. Instead, the university took the roughly 2 percent that the employees were already paying into the defined contribution plan, and redirected the money to the retirement plan. (The money you previously put into the DCP is still yours, to invest as you like — and this money is yours when you leave 91��Ƭ employment; the retirement plan invests your money for you.)

The former DCP deduction will no longer be enough when the 91��ƬRP contribution rate climbs to 3.5 percent — therefore, take-home pay will go down to make up the difference. (The new contribution rate affects only active members of the 91��ƬRP and is subject to collective bargaining for represented employees.)

The university will be paying more, too: 7 percent, up from 4 percent.

Staff and faculty will see their increased contributions reflected in their regular paychecks for July earnings, which will be available from July 20 to Aug. 6, depending on whether employees are paid biweekly, monthly or on another cycle. All employee contributions are pretax.

In July 2012, the rates will go up again, to 5 percent for employees and 10 percent for 91��Ƭ.

— effective July 2011 and July 2012 — as part of a plan to address the 91��ƬRP’s unfunded liability.

The unfunded liability grew out of a contribution “holiday” that lasted nearly 20 years. When it began in 1990, the 91��ƬRP boasted a surplus — and, in fact, the plan reported a surplus as recently as 2007.

Then came market losses and changing demographics. And, with no contributions coming in, the 91��ƬRP found itself with an unfunded liability — which today stands at $14 billion.

This amount will continue to grow (adding pressure to 91��Ƭ’s operating budget) until 91��Ƭ and 91��ƬRP members together begin contributing in excess of 17 percent of pay — enough to cover the plan’s annual increase in cost for active members.

Regents’ actions in the last year to address the pension shortfall include establishing a new tier of benefits for employees hired beginning July 1, 2013, and approving internal borrowing options to better fund the pension plan.

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