After subtracting payable claims, the assets of the UC Retirement Plan (UCRP) grew from $41.9 billion at the end of fiscal year 2005 to $43.4 billion by June 30, 2006, reported the Segal Company, actuary statisticians for the UCRP. This amounts to a 7.2 percent investment return on the plan’s assets, the consultants told the Regents last week.

While that may sound pretty good, the expectation was for a 7.5 percent return rate, and the plan surplus slipped from 110 percent last year to 104 percent this year, according to Segal. This is a steeper decline in the surplus than that predicted in September by a top UC benefits executive.

Other items reported on Nov. 16 to the Regents included a projected cost of $1.3 billion for pension liabilities during 2006-07. This is 15.8 percent of UC’s $8.26 billion covered payroll. The proposed 2007-08 budget includes $60 million for the University’s share of the initial pension contributions.

As yet unknown is the amount of assets that will be retained in the UCRP and the amount that will be transferred to another plan for retirees and active employees of the Los Alamos National Laboratory (LANL). This transfer, once all the regulators sign off, is due to UC creating a new private-public partnership to manage LANL when it won a new contract from the U.S. Department of Energy (DOE) as of June 1, 2006.

A similar shift of pension assets is expected when the Lawrence Livermore National Lab contract expires on Sept. 30, 2007, the consultants said. Another limited liability partnership between UC and private firms has bid for that lab’s DOE management contract.