UCRP Employee Contributions to Resume in 2009
In a systemwide message to all University of California employees, President Mark G. Yudof discussed the impact of the current economic crisis on the UC Retirement Plan and pension benefits, and acknowledged the need to resume employee contributions in 2009.
As of October 31, 2008, the UCRP investment portfolio has experienced an estimated decline of approximately 24 percent for the current fiscal year, and an overall decline of 28.3 percent since June 30, 2007.
“Although the current situation is disconcerting to both active employees and benefit recipients alike, I want to assure you that your UCRP benefits are secure and to remind you that UCRP investments are well diversified,” Yudof said. “The immediate situation only underscores, however, that for the long-term financial health of UCRP, contributions must resume in 2009, both from employees and from the University.”
As of June 30, 2007, UCRP was estimated to be nearly 105 percent funded, compared to 103 percent on June 30, 2008, and as of October 8, 2008, UCRP’s funded status was estimated to be approximately 100 percent.
UCRP has had an extraordinary record of management by the UC Board of Regents for nearly the past half-century, according to Yudof, who noted that, as a result of an unprecedented 18-year contribution holiday, nearly 80 percent of the current UC workforce has not contributed a single dollar to their individual UCRP accounts from which their future guaranteed benefit payments will be drawn.
“At the same time, it is clear there are many long-term challenges regarding UCRP, and it is critical that we continue to evaluate options for achieving two equally important goals: keeping the Plan financially sound and offering retirement benefits that help us to attract and retain the caliber of personnel needed to maintain UC’s quality and competitiveness,” Yudof said.
“This type of evaluation will necessarily span many months, include an analysis of UCRP membership trends and actuarial assumptions, and require extensive consultation with members of the University community, including the Academic Council, the campuses and medical centers, emeriti and retirees, and our union colleagues.”