Archive for November, 2009
Joe Kiskis attended the UCRP Advisory Board meeting (or, as Joe would call it, the “Advisory” Board) in Oakland last Friday on behalf of all of us and sends us this report:
Highlights from the UCRS “Advisory” Board meeting Nov. 13, 2009
A) In this discussion, it is important to distinguish between the Regents _policy_ on funding and what they actually do.
B) Academic Council position on restart of contributions:
This Council position would require a contribution far higher than the 6% = 2% employee + 4% employer now scheduled to begin on April 15, 2009 and to continue into 2010. The numbers are now worse than they were when the Council letter was written. If the Regents were to fund their own policy starting in June 2010, it would require a total contribution (employer + employee) of about 20% of payroll. That is basically the 17% steady state number plus 3% to amortize the first 1/5 of the $1OB lost last year.
1) The fund performance for the third quarter of this calendar year was very strong: up about $3B or about 12%. For the whole calendar year, it’s up about 18%. Note that most of the numbers you will see quoted and used for the official calculations are based on the June 30, 2009 end of the fiscal year situation. For that FY, the fund was down about 19% or about $10B.
2) Based on the official methodology with 5 year smoothing, UCRP is now 95% funded. If the full loss from last year were included, it would be 71% funded.
3) As already mentioned, if the Regents were to follow their methodology
adopted in Sept. 2008, the total contribution for 2010-2011 would be about 20% and would rise to about 36% in a few years. Even with that, it would take about 20 years to get back to 100% funded and a normal cost contribution of 17%. If we follow the current slow ramp up plan, i.e. only slowly approaching the Regents policy, then by the time we get out about 10 years, the accumulated additional shortfall would require a 50% contribution to fund Regents policy. This is the really bad situation that has been discussed for some time now. The new part is just the more precise and official 20% quoted above. You can find all this discussed in detail in
4) Based on the dire numbers, there was a discussion that focused on whether the Regents could be persuaded to follow the Academic Council recommendation. The suggestion was made that the UCRS “Advisory” Board recommend that the Regents follow the Academic Council recommendation. It appeared that everyone agreed with that. However, and here I come to the part about why I have been putting “Advisory” in quotes, the person from the Office of the University Counsel pointed out that although the board has “Advisory” in its name, it is not allowed to give advice or make recommendations. On the other hand, it can express concern or suggest that certain things be considered. It was agreed that the Board should use whatever language it could to support the Academic Council recommendation.
Also last week, the Task Force on Post-Employment Benefits listening tour was at Davis last Monday. A pdf of the powerpoint is available at
There are also links to various video formats of the presentation at
The proposed Regents’ budget for 2010-2011 is now online.
Really long version:
“Key elements” include: maintaining only a 4% employer contributions and 2% employee contributions to the UC Retirement Plan for the duration of 2010-11; preserving the quality of employee and retiree health benefits programs; ending the furlough/salary reduction plan on August 31, 2010; continuing the academic merit salary increase program; increasing student fees 15% in January and then another 15% for next fall; and a proposal to reduce systemwide enrollment by a further 2,300 (current year is already reduced by 2,300), while continuing to expand infrastructure and facilities.
An article in the California Aggie about proposed legislation to begin taxing oil extraction to create funds for public higher education quotes DFA member Joe Kiskis. The full article is at http://theaggie.org/article/2009/11/16/oil-severance-tax-aims-to-support-higher-education and here is an excerpt:
AB 656 proposes a 9.9 percent oil severance tax for California oil drilling and natural gas companies. It is estimated that the tax would allocate $1 billion for UCs, CSUs and community colleges. The Council of UC Faculty Associations expressed its support for this bill in April… “The new funds would replace some of the lost state support and would therefore reduce the pressure for further fee increases and cuts to educational quality. However, this bill would fall short of generating enough additional money to restore a healthy level of university funding,” Kiskis said in an e-mail interview.
About a hundred people showed up for the teach-in Monday night. Speakers included: Nathan Brown (faculty member), Tarone Bittner (of AFSME), Kaitlin Walker (graduate student), Catherine Fung (graduate student), Ian Kennedy (faculty member), Joshua Clover (faculty member), Jeffrey Bergamini (of UPTE), Jim Davis (lecturer), Kevin Roddy (lecturer), and Sarah Raridon.
Your students may have a lot of questions about the impending fee increases, and about the funding situation of UC in general. Faculty and students at UC Davis are sponsoring a teach-in from 7 to 9 pm on Monday in Giedt Hall Room 1001. The DFA recommends that you mention this teach-in to your students so they can plan to attend.
If you wish to present some information about the crisis, we have PowerPoint slides here, and there are a number of articles at the Keep California’s Promise website that would make good handouts (of particular interest for this use might be the 2 page overview discussion guide, the 1 page article on how tuition is being used to leverage Wall Street bonds, or the 2-page article about the disproportionate growth in administrative positions at UC).