UC offers employees attractive pension and retiree health benefits as part of its efforts to attract and retain outstanding faculty and staff, as well as to reward employees for their years of career service. But the cost of those benefits has increased substantially, a trend that is projected to continue.

The President's Task Force on Post-Employment Benefits has been charged with developing options for balancing the long-term costs of post-employment benefits with the need to provide competitive compensation to faculty and staff. The Task Force will study the issues, weigh input from the UC community, and then make recommendations to UC President Mark Yudof on ways to change the funding and policies for post-employment benefits

The Task Force is holding forums at UC locations throughout the fall to give faculty, staff and retirees the opportunity to ask questions and learn about how fiscal pressures are affecting the University's pension and retiree health programs.

The forums will be tailored to local group needs and include a presentation on the issues, followed by time for participants to ask questions. The schedule of local sessions is beginning to take shape and will be available online at the Future of UC Retirement Benefits website. So check back for more campus-specific dates and watch for local announcements.

By the numbers
UC spends roughly $1.5 billion annually in pension benefits, and the retirement plan accrues an additional $1.3 billion in pension liability each year for its current employees. The funded status of the UC Retirement Plan is expected to decline from 95 percent to 61 percent by 2013, even with the restart of contributions in April, 2010.

The University also pays approximately $225 million each year for retiree health benefits. That expense, which is paid for with operating revenue, is projected to increase by about $37 million per year. By 2013, UC will be spending $373 million annually and by 2018, the figure will have climbed to an estimated $610 million.

The University's long-term liabilities for retiree health benefits for current and future retirees are also projected to increase, from $13 billion today to nearly $26 billion by 2018. In other words, the liability is increasing at a rate of more than $1.5 billion per year. Governmental accounting regulations now require UC and other employers to include this liability in their financial statements. Such a significant liability could affect UC's credit rating when borrowing money for campus buildings, hospitals and other projects.
More information about the Task Force, including a list of its members, is available on the Future of UC Retirement Benefits website.