Tuesday, April 9, 1996
Jack Peltason donates retirement bonus to furthering educationBy
Michael Howerton
Daily Bruin Staff
The Board of Regents approved a new scholarship fund in the name
of past UC President Jack Peltason and his wife, Suzanne, from the
hefty retirement bonus they refused to accept.
At last month’s meeting, current UC President Richard Atkinson
asked the regents to allow Peltason’s retirement bonus to be used
to establish the Jack W. and Suzanne T. Peltason Student
Scholarship fund, as the Peltasons had requested.
The regents approved Atkinson’s request unanimously and board
Chair Claire Burgener thanked the Peltasons for their continued
support of the university.
"This is a very generous act on the part of the Peltasons,"
Burgener said. "It will be a tremendous help. It will mean the
difference between success or failure for a whole group of
students."
The $230,711 will be invested and the scholarships will be
funded solely from interest generated by those investments,
Burgener explained. The regents decided not to permit the principal
funds to be used at any time. Since the current yield for such an
investment is around 10 percent, about $20,000 will be available
each year for the scholarship, he said.
The Peltasons already have a scholarship fund set up at the
Irvine campus, where Peltason was chancellor from 1984 until he was
named UC President in 1992. They requested that the funds from the
retirement bonuses be used to aid students in light of the dire
fiscal straights in which the university has found itself in recent
years.
"It’s a tight time in the university right now and we felt
reluctant to take (the bonuses)," Suzanne Peltason said. "We have
enough to live how we want to live, so we asked if it could go to
the students who needed it."
The rejection of the bonuses touches on an issue that has
elicited much debate in the university over the appropriate bonuses
high UC officials should receive for their services.
Large retirement bonuses for high university officials have
recently come under fire for being extravagant at a time when most
other areas of the University of California have become
increasingly strapped for cash.
UCLA Chancellor Charles Young, criticized in past weeks for the
$150,000 to $250,000 he will receive when he retires next year,
defended the practice commonly refereed to as "golden parachute."
With the increasing competition from other schools across the
nation for high level candidates, the UC system has to remain
competitive by offering attractive retirement bonuses, Young
explained.
But critics charge that these bonuses are an unnecessary and
embarrassing drain on university resources. The best known example
is the $1 million "golden parachute" the Board of Regents approved
for retiring UC President David Gardner who left his post in
1992.
That use of university funds outraged many community
members.
"At that time, when David was president, money was flowing
throughout the institution, due partly to his wonderful work during
his nine years of service," Suzanne Peltason said. "Everybody was
getting raises, but when he left, the university fell on hard times
and (his retirement bonus) looked terrible."
Even though the regents reformed their policy to lower the
amount awarded upon retirement, Peltason, who was the next UC
president, was due to receive at least $230, 711 when he left his
post.
The bonuses, which were declared null and void by Peltason, were
approved by the regents in April 1992. The bonus package is a
combination of deferred funds which have been accruing from
non-state funds and extra compensation to restore pension funds
which would have been lost under changes in the federal tax
codes.
"I feel that the deferred compensation is a good thing, and it’s
not that we are against it. It would have been nice to pay off our
mortgage, but it’s just not a good time for the university,"
Suzanne Peltason said, who added that they will continue to receive
their retirement pension from the university.
"When money is short, nothing is easy," she said, "and by being
able to provide a little extra to help build community, we could
feel a part of the university and that is so important."