Davis Faculty Association

Archive for the ‘Benefits’ Category

FA statement to the UC Regents about proposed new UCRS tier

Professor Celeste Langan spoke on behalf of the UC Faculty Associations at the July 22, 2015 UC Regents meeting during the public comment period. Below is a copy of her full comments:


 

As co-Chair of the Berkeley Faculty Association and on behalf of the Council of UC Faculty Associations, I wish to address the Regents concerning the third discussion item of the Finance Committee agenda, item F3, “Update on Final 2015-16 Budget.” The update, produced by the Office of the President, misleadingly claims that the final budget “incorporates the funding framework developed by UC and the Governor.” If you’ll recall, the “framework” of the May Revise proposed that the state make a contribution of $436 million toward the unfunded liability of the UC Retirement Plan. The final budget, however, promises only a “one-time payment” of $96 million; there is nothing in the budget that commits the state to two additional payments of $170 million. Yet even this meager one-time payment is contingent upon Regential approval of a cap on pensionable salary consistent with PEPRA (Public Employee Pension Reform Act) for employees hired after July 1, 2016.

The Council of UC Faculty Associations is opposed to the University making permanent changes in the structure of its retirement plan in exchange for a very modest one-time contribution from the State. We are especially opposed to the introduction of a full defined-contribution option. There is absolutely no justification for the proposed introduction of a full defined-contribution option; neither the Legislature nor the Governor called for the introduction of a Defined Contributions plan in aligning the UCRP with PEPRA. Yet UCOP seems bent on introducing such an option, to the point that their statement exposes their intention as a foregone conclusion rather than a possible outcome of consultation and deliberation — those elements of what we once understood as “shared governance.”

I call your attention to the third paragraph on page 3 of the F3 agenda item. First OP declares, “The President will convene a retirement options task force to advise on the design of new retirement options that will include the pensionable salary cap consistent with PEPRA. The retirement options will be brought to the Regents next year for review and approval.” But apparently the “design of new retirement options” is a fait accompli, for the penultimate sentence of that paragraph declares, “new employees will have the opportunity to choose a fully defined contribution plan as a retirement option, as an alternative to the PEPRA-capped defined benefit plan.”

Since the two minutes allotted in the public comments session is the temporal equivalent of Twitter’s 140 characters, let me ask: #What’s up with UCOP? If I had to speculate, I’d say that UCOP’s attempt to replace Defined Benefits with Defined Contributions suggests its preference for a mobile, “flexible,” precarious professoriate with a consequently short-term institutional memory — a professoriate that wouldn’t recall that only 6 years ago, the relative merits of defined contribution versus defined benefit plans were thoroughly, carefully, and widely discussed by UC constituents. Given substantial evidence that defined benefits are more cost-efficient than defined contributions in achieving the same level of benefits, it was agreed that the University of California was best served by continuing with UCRP as a defined benefit plan. Thus in 2010, when the President recommended and the Regents endorsed pension reforms, UCRP was preserved as a defined benefit plan.

Ironically, the paragraph in question concludes, “For represented groups, retirement options will be subject to collective bargaining.” Well, the UC Faculty Associations represent a good number of those faculty, members of the Academic Senate, without collective bargaining rights, and we say that UCOP has vitiated the interests of that faculty, both those vested in the current UCRP and those who will be hired after 2016. We deplore the introduction of a different tier of faculty benefits, but we firmly oppose the attempt of UCOP to introduce a fully defined contribution plan in this untoward and unjustified manner.

Potential change in UC healthcare options

Faculty Colleagues: as you may be aware, the University of California is considering restructuring the provision of medical plans for its employees across the ten campuses of the system. These changes would have a dramatic impact upon the health care options currently available to faculty and other UC employees. In brief, the plan is to create a new UC Care HMO program that will replace Health Net and possibly Kaiser. The aim is to generate savings for the university by forcing UC employees into a monopoly healthcare system that will be both less convenient and more expensive to use, as well as cause severe inequities of provision between campuses.

More details can be found in a letter that the CUCFA Board (CUCFA is the systemwide organization of faculty associations that the Davis Faculty Association belongs to) has written and plans to send to President Napolitano, asking her to undertake serious study of the manifold consequences of this plan and to make transparent the financial projections driving it. We would like for faculty to add their names to this letter so that President Napolitano sees how important these health care options are to us. If you are a UC faculty member, please add your name to the letter by visiting:

http://cucfa.org/healthcare-options-petition/

Continuing deterioration of compensation and benefits

Dear Colleagues,

A year ago Colleen Lye and James Vernon, co-chairs of the Berkeley Faculty Association, drew the attention of faculty across the ten campuses of the University of California to the continuing degradation of their pensions, benefits and salaries.

Faculty were, they noted, still underpaid in relation to their peers at competitor institutions. Despite this salary gap they were being increasingly asked to pay more but get less from their health insurance and pensions. Moreover, the introduction of a new and less generous pension ‘tier’ for those hired after 2013, last year’s chaotic roll out of the new health plans with the prestige UC Care option working only on campuses with medical schools, and the cutting adrift of out of state retirees from all health plans with a good luck lump sum payment of $3,000, created new inequities between UC faculty.

This analysis has recently been confirmed by UCOP’s own study of total remuneration. The executive summary of this document contains the following depressing bullet points:

• Between 2009 and 2014, UC’s total remuneration fell from 2% below market to 10% below market.

• Health and welfare benefits fell from 6% above market in 2009 to 7% below market in 2014, primarily caused by higher medical employee contributions at higher salary bands compared to the market.

• Changes to retirement plan designs since 2009 reduced positioning against market from 29% above market to 2% below market.

• Total retirement decreased from 33% above market to 6% above market.

• Total benefits decreased from 18% above market to 1% below market.

It is the first UCOP study to compare the new (2103) and old (1976) tier benefits for UC faculty with equally depressing results.

• New tier retirement benefits (the defined benefit plan) are valued 16% below old tier retirement benefits.

• New tier retiree health benefits (medical, life, dental) are valued 23% below old tier retiree health benefits.

• New tier retirement benefits (defined benefit plan plus retiree health) are 17% lower than the old tier.

In short, we have moved to a new system where the old deferred benefits of our pension and healthcare helped offset lower salaries to one in which the cash compensation of salaries still lag behind our competitors and in addition benefits have now also been reduced to a point where they are below comparable institutions. In 2009 UC cash compensation by salary represented 68% of total remuneration, yet for assistant professors in 2014 it represents 86%.

The Faculty Associations believe that it will not be possible to retain and protect the quality of UC faculty if their salaries remain uncompetitive and the value of their deferred benefits continue to erode dangerously.

On-line petition to President Napolitano regarding health insurance

As you are probably aware, there have been many recent changes to UC Health Care, including the removal of UC retirees from UC health plans if they move out of California, reduction of UC contributions to retiree health care from 100% to 70%, and the discontinuation, a year ago, of Blue Cross Plus, Blue Cross PPO, and Anthem plans and their replacement by a new “self-funded” PPO medical insurance plan, UC Care, that left many UC employees without access to nearby providers.

In the last month, an especially difficult situation has arisen due to abrupt termination of Blue Shield’s contract with Sutter Health. The following petition message was written by the Santa Cruz Faculty Association, sister chapter of the Davis Faculty Association, requesting that President Napolitano look into these recurring problems and ensure reliable health care for UC employees.

 


 

Dear Colleagues,

As most of you are doubtless aware, the recent breakdown in talks between Blue Shield and the Palo Alto Medical Foundation (Sutter) could have enormous and negative consequences for UC employees, many of whom will lose coverage or be forced to change medical providers. This impasse is only the latest in a series of changes to UC health insurance, and we are very concerned about the overall downward trend. We believe it is important for UC faculty to register their concerns and so are sponsoring the following petition, urging President Napolitano to make improvements to health insurance a top administrative priority.

We invite ALL UC faculty and staff – at ALL campuses to sign the petition, forward the link widely, and encourage your colleagues to sign as well.

To sign the petition, please go to the petition page at http://ucscfa.org/blue-shield-sutter-petition/

In solidarity,
The SCFA

The Degradation of Faculty Welfare and Compensation

UC faculty need to wake up to the systematic degradation of their pay and benefits. In 2009, when the salary furlough temporarily cut faculty salaries between 6 and 10%, faculty were outraged. Yet since then our compensation has been hit by a more serious, and seemingly permanent, double blow.

First, despite modest salary rises of 3% and 2% in October 2011 and July 2013, faculty take-home pay has been effectively cut as employee contributions to pension and healthcare have escalated. Faculty now pay more for retirement and healthcare programs that offer less. Secondly, faculty are no longer treated equally. Different groups of faculty are increasingly pitted against each other as – depending on our age or where we live or when we were hired – we receive different levels of retirement, health and other benefits.

Faculty salaries were already uncompetitive. Even with the recently-announced 3% raise, they remain 10-15% below UC’s own comparator institutions and a further 10% behind those of the private 4 (Stanford, Yale, Harvard and MIT).

Back in 2009 strong benefits, in the form of pension and health care provisions, once allowed UC to excuse its uncompetitive salaries by reminding us of what it called our ‘total compensation package’.

This is no longer true. Now, as continued austerity management grips University administrators, and campaigns are launched to divest public sector workers of their pensions and retiree healthcare, faculty are being stripped of these deferred (and other) benefits.

One reason faculty are largely unaware of the degradation of their benefits is that changes have been made incrementally and target different constituencies. Gone are the days when all faculty and retirees were treated equally and received the same benefits. And yet for all faculty these changes mean we are paying more and getting less.

Firstly, faculty are divided by a new two-tier pension system. The old pension, the so-called 1976 tier, has seen a steady escalation of employee contributions from 0% in 2009 to 8% in 2014. These raises alone mean that faculty take-home pay has deteriorated by as much as 3%.

The new pension introduced for those hired since 2013 has begun with a 7% employee contribution. Despite paying more new faculty get less. The minimum retirement age has been raised from 50 to 55, the retirement age for maximum pension has been raised from 60 to 65, and the lump sum cash-out and subsidized survivor benefits have been eliminated.

Secondly, although there is as yet no legal evidence that retiree health benefits are less ‘vested’ (and thus unalterable except by legislation) than pensions, they have been progressively stripped. And here again different groups of faculty are treated differently.

Since 2010 UC’s contribution to retiree health benefits has fallen from 100% to 70%, but this pales in comparison to the changes introduced in 2013 which have affected 50% of faculty and staff. All new hires, together with those with fewer than 5 years of service, or those whose age plus service is fewer than 50 years, will now receive nothing from UC towards their healthcare if they retire before 55. Meanwhile contributions for those retiring after 56 will be on a sliding scale (depending on length of service) beginning at just 5%!

Worse still, in what is being considered a pilot program by the Regents, retirees no longer living in California have been removed from UC’s insurance plans. Instead they will be given a lump sum of $3,000 per annum to help defray costs not covered by Medicare. This represents a significant shift of the risk and the responsibility for healthcare from UC on to retirees. If it generates the projected $700 million savings of total liability as reported by UCOP’s CFO to the regents this year, it is likely soon to be coming to a group of retirees near you.

Thirdly, in the fall, the majority of faculty and staff were forced to change their healthcare plan in little over two months. We were promised that these had been negotiated to secure great savings for UC and lower insurance rates for all UC employees. It quickly became clear that those lower monthly rates masked a huge turnover in eligible providers, geographically uneven coverage of service (across as well as between campuses), and considerably higher deductibles. It is too soon to calculate how much more faculty are paying for their healthcare, but once again we are certainly paying more for less.

It is time for faculty to wise up to this systematic and universal downgrading of our salaries and benefits that also sets different groups of us on different tracks. The contrast with the new contracts recently signed by CNA, UPTE and ACSFME is worth noting. In addition to significantly improved salaries, these unions have been able to maintain a single-tier pension (for an additional 1% contribution) and retain retiree health benefits.

So how will faculty respond? With a sigh of resignation? A determination to get an outside offer that would increase one’s personal compensation package? Or will we seek better mechanisms that would permit faculty to negotiate all elements of our compensation rather than have it decreed, and diminished, from on high?

Important Changes to Health Care Plans in 2014

This is a post to alert you to an issue that will affect all members of the UCD faculty and staff. As you may have seen in an email from UCOP, UC has shifted the health insurance structures for all UC employees. While these changes are part of a cost-reduction scheme, some of the details of the plans may well leave employees in complicated circumstances as some insurance plans are dropped or current providers no longer covered at the same level. For an initial look at the planned changes, please see:

http://atyourservice.ucop.edu/oe/

While the At Your Service website now has some details of the upcoming plans, some details will not be released until mid- to late- October. UCOP is planning to hold Town Hall-style meetings at UCD to try to inform employees of the details of coverage in time for the November Open Enrollment period. UCD’s Health Care Facilitator Program and Employee Benefits offices will also be presenting on this, but the dates for these presentations will not be set until early October. This will not leave people with much time to discover all the information necessary to make sound decisions on this crucial issue.

The DFA Board is making the following recommendations to members to try to ensure that as many employees as possible receive the information they need in time for Open Enrollment:

* request that department chairs publicize the fact of the upcoming changes in insurance policy at full faculty and department meetings

* at these meetings, suggest that all employees attend the town hall or healthcare facilitator meetings held by the campus

* prior to the town halls, employees should think about what their likely individual or family health care needs will be for the next five years, and come to the town halls with questions about which plans will best suit those needs. Your doctor might have specific recommendations on this point, so you might consider asking for a wellness visit in advance of open enrollment to discover these needs

* if you or someone you know has particularly complicated health care needs that may be imperiled by a shift in insurer or provider, and the health care plans themselves have been unhelpful, please contact the UC Davis health care facilitator (http://www.hr.ucdavis.edu/benefits/1hw/hcf). The more details UCOP has about the potential impact of the new insurance scheme, the better the chances that we can try to get everyone’s needs met. The Academic Senate is working hard to pressure UCOP to structure the new insurance scheme in ways that meet the needs of as many faculty as possible, but it needs as much information as possible for that to happen.

In short, please inform yourself as deeply and as far in advance as possible as to the impact of the upcoming changes, and try to use departmental channels to ensure that your colleagues and staff do as well.

The DFA is deeply concerned that faculty have been so poorly and lately informed of these changes that could have major implications for their healthcare. The task now is to ensure that its members are alerted to these changes and that Senate leaders are informed of the difficulties they may generate for faculty.

Follow-up on healthcare facilitators: funding restored

Last month we notified you of an ongoing issue regarding funding to support healthcare and retirement counseling programs. The lobbying by the senate, retirees, and FA’s was successful: Dwaine Duckett, UCOP VP of Human Resources, has announced that UCOP will continue to provide central funding for health care facilitators at all  campuses. A memo stating this was sent to CHRO’s on each campus. The review of the program continues, and it is not clear what the long term resolution to this issue will be.

UCD’s healthcare facilitator program threatened

Members of the Davis Faculty Association should be aware of an ongoing issue regarding funding to support healthcare and retirement counseling programs on this campus.

The basic facts of the current situation are as follows. The Office of the President has cut central funding for the healthcare facilitator program, leaving it up to individual campuses to make their own decisions about funding for the program. The healthcare facilitator program is housed in Human Resources at UC Davis. Healthcare facilitators on our campus have in the past provided valuable assistance to faculty and employees in negotiating health care issues with insurance companies and providers. Some DFA members have in the past personally benefited from this personal one-on-one assistance.

On other campuses, various changes are looming as a result of the cuts. For example, UCSF has decided to fund its own program and retain its own facilitator to serve their employees, but possibly not their retirees. By contrast, UC Riverside is in process of closing its benefits office entirely. Here at UC Davis, the Human Resources department is being reviewed by external consultants at the request of the Chancellor. The staff in HR are very worried about funding for the healthcare facilitator program and for retirement counseling services as well. The Davis benefits office now has only two retirement analysts because vacancies have not been filled. It is possible that this office could be closed completely and our members would have to deal with unknown individuals on the phone at a central facility for help with retirement planning and with healthcare issues – not an ideal way to handle complex health and retirement issues.

The Academic Senate is aware of the problem; Faculty Welfare has created a task force under the direction of Prof. Robert May of Linguistics to come up with recommendations. The DFA is tracking developments in this issue and will keep members informed when further news is available.

As the campus considers cuts to a program that serves the faculty and staff at a very personal level, it is worth pointing out that the UC system now employs more administrators than faculty (see http://keepcaliforniaspromise.org/2001/ucs-administrators-crossed-the-line). At Davis, Senior Administrator FTE has grown 1.5% and Academic Administrators (this includes reclassifications of staff) have grown by 27.1%, while faculty FTE have declined by 5.6% between October 2009 and April 2012 (the latest available).

CUCFA Responds to UC Commission on the Future Report and Pension Reform Plan

The following is a press release that the Council of UC Faculty Associations distributed to media outlets:

At their Special Meeting on Monday, December 13, the Regents of the University of California will be making decisions on two significant issues – endorsing the principles of the UC Commission on the Future (UCOF) and drastically changing the University of California Retirement Plan (UCRP).

“One thing we can agree on, said Robert Meister, President of the Council of UC Faculty Associations “is the first sentence of the UCOF Report: ‘UC is at a crossroads.’” Meister continued, “Unfortunately the University leadership has ignored the outcome of this year’s election and is about to enshrine outgoing Governor Arnold Schwarzenegger’s vision of a privatized higher education system. The result will be a lower quality more expensive institution financed by ever increasing student debt.”

While faculty now use online tools to enhance their classroom teaching, CUCFA is concerned that the move toward fully online courses “taught” by non-research faculty and grad students, coupled with a push toward three-year degrees, means that future UC undergraduates will be trained in job skills rather than educated as citizens, leaders or thinkers. “On-line ed, apart from its notorious drop-out and failure rates, is designed to impart information, not create reflective, creative and articulate citizens,” argued Wendy Brown, co-chair of the Berkeley Faculty Association. She added, “the three year degree path will inevitably compress breadth and major requirements, discourage double majors and further attenuate aspects of an undergraduate education that broaden the individual and shape a thoughtful citizenry to engage an increasingly complex world.”

The UCOF also envisions increasing out-of-state undergraduate enrollment to raise more money. “Increasing out-of-state enrollment would raise revenues for only a few campuses—not the system as a whole—while decreasing the opportunity for Californians wishing to attend UC,” according to Meister. “The result,” he said, “will be increasing enrollment pressure on CSU and the Community Colleges.” To raise revenue, he argued “UC should make private businesses pay the full cost of the research they hire it to do, rather than losing money on such contracts as it presently does.”

CUCFA continued to express concern about proposals to reform the University of California Retirement Plan. Christine Rosen, Berkeley Faculty Association co-Chair and CUCFA Secretary, said, “I am still concerned about the inequitable two-tiered nature of the new proposal. Employees hired on or after July 1, 2013 will only have access to a pension plan with lower benefits.”

Rosen continued, “despite large increases in the UC and employer contributions, the new plan still does not adequately address the unfunded liability created by the 20-year suspension of contributions by the UC, the State of California, and UC’s employees.” It is not likely, she argued, that the still very vague proposal to borrow from the University’s Short-Term Investment Pool (STIP) and/or restructure University debt using STIP interest to fund the UCRP Annual Required Contribution (ARC) will be enough to raise the $4.5 billion needed to bridge the gap identified by the PEB Task Force between the funds raised by the contribution increase and the sum needed to fully fund the ARC prior to 2018, when contributions are supposed to reach a level where they can satisfy the ARC. Rosen also expressed concern that the plan seems to put UC on track to funding UC pension liabilities in part by charging employees more for health care. “The proposal to increase employee contributions to their healthcare premium, coupled with a big increase in employee contributions to their retirement plan, represents a cut in take home pay that will make it increasingly difficult for UC to recruit and retain outstanding faculty and staff.” Because this is happening without a plan to fully fund the ARC, she argues, the pension plan’s unfunded liability will continue to grow, putting its future increasingly at risk, despite the sacrifices UC and its employees are making to increase their contributions.

In his October 14 letter to President Yudof, CUCFA President Meister warned that, “a never-ending cycle of … more contribution increases, and more benefit cuts [would make] anticipated benefits … less cost effective, less calculable and less secure, [and lead] many lower and middle income employees [to] demand a defined contribution opt-out. Our defined benefits system would then collapse due to adverse selection.”

Regents meeting this week: benefit cuts and tuition hikes

The UC Regents are meeting this week. Issues to be discussed include a proposal to raise student fees yet again, this time by 8%. The student fee hike is scheduled to be discussed Thursday at 8:50 am. The Regent’s will also discuss a cut to employee benefits. This benefits discussion is scheduled for Thursday at 10:15 am.

The Council of UC Faculty Associations (of which the Davis Faculty Association is the local chapter), has sent open letters to Yudof addressing each of those issues. CUCFA’s take on post employment benefit changes is at http://cucfa.org/news/2010_oct14.php (please note the link at the top of that page leading to a longer discussion on this topic). On the issue of tuition increases, see http://cucfa.org/news/2010_nov15.php

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