Under a new funding policy approved by the Board of Regents of the University of California, the university and its workers will be required to contribute toward their retirement pension plans as early as next year.
The plan re-implements contributions from UC and worker personnel years after they were removed. Under a funding surplus from the early 1990s, the regents are to suspend any contributions toward the retirement plan, but due to new budget constraints, the contributions will have to begin again.
"We have had a surplus in pension plan which enables us to cover operating, and that surplus is running out, so we need to restart contributions," said Paul Schwartz, a spokesman for the UC Office of the President.
The new policy on the UC Retirement Plan was approved by the Board of Regents on Thursday at the conclusion of their three-day meeting at UC Irvine, and a decision on exactly how much the university and each employee will be expected to contribute is expected to be reached during a future meeting.
"The university actuary will come back in November and make a presentation to the regents about the current valuation of the pension plan and make recommendations to the total contribution from the university and from employees," Schwartz said.
However, it will not be until early in 2009 that the regents are expected to make a decision on the initial levels of contributions expected, he added.
The approved plan calls for contributions to the retirement plan to restart in July 2009. According to a statement released on the UC Human Resources Web site earlier this week to UC employees, the university expects there to be no impact on the employee’s net take-home pay during the first year.
This is "because employee contributions could begin in the form of a redirection of mandatory employee contributions currently going into the UC Defined Contribution Plan," the statement reads. The funds, therefore, would be redirected toward each employee’s retirement plan instead of a general pool of funds.