UC: No Pension Pay-In for 2007
It is now official—employee contributions to the UC Pension Plan (UCRP), originally slated to resume in July, have been postponed for at least the rest of the 2007-08 fiscal year. The “strong performance” of pension assets this past fiscal year was credited for the reprieve.
The UC Office of the Treasurer announced preliminary estimates last month that UC’s pension investments were up 19.1 percent for the fiscal year. The UCRP return is estimated and gross of fees, the announcement said.
“Given the strong performance of the University’s pension fund, the actual start date for the restart of pension contributions is being revisited,” said Katherine N. Lapp, UC’s executive vice president for business operations. “However, it is important that everyone understand that the restart of contributions must occur in the near future to maintain the long-term viability of the plan.”
In announcing the preliminary performance figures, UC Vice President of Investments Marie N. Berggren pointed out that UC’s returns compare favorably to the fiscal-year performance of two major California public employee pension funds.
The California Public Employees’ Retirement System earned a 19.1 percent return, while the California State Teachers’ Retirement System posted a 21 percent return on assets.
“Performance is one important measure of the health of a pension fund,” said Berggren, who also serves as acting treasurer of the Regents. But the pension plan must also be sufficiently funded to meet all its future obligations. Since 1980, the number of UCRP active members has almost doubled (66,000 to 122,000), and there are 10 times as many UC retirees now (3,900 to 37,000).
Berggren reported that, as of the last actuarial report, which was for 2005-06, the UC retirement plan’s funded ratio was 104 percent, compared to other California funds that today are only 87 percent funded.