UC Regents will consider a plan to set the employee and employer contribution rates to the UC Retirement Plan at their Feb. 5 meeting. Under the proposal, contributions would begin April 15, 2010.

If approved, the plan calls for a 2 percent employee contribution and a 4 percent university contribution. Contributions from union-represented employees are subject to collective bargaining. Initially, there would be no impact on the net take-home pay of employees: The mandatory payments to the DC (defined contribution) Plan – 2 percent for most employees – would be redirected to the UCRP.

The plan Regents will consider calls for gradual yearly increases in contributions from both the university and employees. The long-term approach to how UC and employees share the cost of UCRP benefits is expected to be consistent with the state's approach to CalPERS contirbutions. Currently, most CalPERS employers contribute 16.5 percent. CSU employees currently contribute 5 percent, an amount that has not changed since the 1970s.

For more details of the proposed UCRP contributions plan, visit www.universityofcalifornia.edu/regents/regmeet/feb09/j3.pdf.

If approved, contributions would start nine months later than had been anticipated when Regents agreed in September to restart contributions. A shortfall in state funding for the employer contributions requires the start date to be pushed back. UC had requested state funding of $228 million, but the governor's January budget proposal included only $20 million for employer contributions to the fund in 2009-10.

At their November 2008 meeting, UC's actuary had recommended total combined contributions from both UC and employees to total around $875 million. That amount is needed to meet the future payout obligations of the fund. There have been no contributions made since 1990 when the plan had a funding surplus.

For information about the actuary's report, visit www.universityofcalifornia.edu/regents/regmeet/nov08/f10.pdf

Looking ahead, the plan also proposes creating a presidential task force to develop a long-term approach to post-employment  benefits. This task force would include representatives from a cross-section of stakeholders.

For more on the UCRP contribution restart, visit www.universityofcalifornia.edu/news/ucrpfuture/welcome.html