DANIEL WONG Student Regent-designate Tracy
Davis and current Student Regent Justin
Fong listen at the Board of Regents meeting.
By Timothy Kudo
Daily Bruin Senior Staff
The UC Board of Regents tentatively put an end to casual
employment and discussed the removal of tobacco stocks from future
investments at Wednesday’s meeting, which took place in Covel
Commons.
The discussion over whether to divest from tobacco companies
comes on the heels of a meeting of the Regents’ Investment
Advisory Committee last month, in which members discussed the
feasibility of such an action.
Two dozen public and private universities have already made
similar decisions because of the controversial nature of such
investments.
The last time of note that companies removed stocks from an
index fund was when people began boycotting South Africa by pulling
out their investments in the country, said Stephen Nesbitt, senior
managing director of Wilshire Associates, the regents’
investment consultant.
The UC is planning on investing in the Russell 3000 and Morgan
Stanley index funds with about $45 million of those investments in
tobacco.
But several problems can arise by removing the stocks because it
makes using the funds as an economic bellwether less accurate.
“Suddenly it becomes more difficult to track that
index,” Nesbitt said.
He also noted that there could be fiscal impacts and that
determining the risk of the fund could be more difficult if the
change is made.
From a financial perspective, Regent Judith Hopkinson, the chair
of the Committee on Investments, expressed concern as to how the
changes might affect the regents’ oversight of such
matters.
Currently, the regents invest in index funds to make monitoring
their stocks easier. By doing this, the UC can maintain a small
staff in the Office of the Treasurer and hiring an outside investor
is unnecessary.
By making these changes, Hopkinson said, that benefit could be
lost.
“The more stocks we exclude from an index, the more we
become active managers and it becomes self-defeating,” she
said.
In addition to the discussion on stocks, the Committee on
Finance approved an item that would end the practice of long-term
casual employment throughout the university.
If approved by the entire board today, starting in 2001,
retirement benefits would extend to employees who work 1,000 hours
during a 12-month period. The change may also be retroactive for
employees who were meeting the requirements in the past.
Casual employees are workers who are supposed to be hired on a
temporary basis, and thus, don’t receive benefits. Unions
representing UC employees allege that the university abuses this
policy by firing casual workers before university guidelines
mandate that they should be hired full-time and receive
benefits.
“We believe this (decision) is an end to the abuse of
casual employment,” said Cliff Fried, the executive vice
president of the University Professional and Technical Employees
union.
When an employee is eligible for retirement benefits, that makes
them eligible for other benefits as well.
In the past year, the issue of casual employment has been a
unifying rallying point for many of the unions, which have
protested and even held a joint forum to discuss the issue.
Recently, a grievance filed by UPTE against the university was
decided in the union’s favor, mandating that the university
hire the employee in question as a full-time worker.
Judith Boyette, associate vice president of human resources and
benefits for UC, said that the change was proposed in response to
recent victories by the unions.
In negotiations with the university, the American Federation of
State, County and Municipal Employees union recently negotiated a
similar policy to the one approved by the regents.
But the decision came before the regents because they are the
only ones with the power to make changes to the retirement system,
Boyette said.
Today the entire board will vote on whether to approve the
committee’s recommendation. Such measures usually pass
without question.
The meeting of the UC Board of Regents is broadcast live over
the Internet. For more information visit the Web site http://www.ucop.edu/regents.