University of California employees will be paying more for their retirement benefits following a decision today by the governing board of regents.
Right now UC employees pay 2 percent of their salary into the UC Retirement Plan and the university pays 4 percent. Under the plan regents approved today, employees will start paying 3.5 percent in July 2011 and 5 percent in July 2010. The university will increase its contributions at the same time to 7 percent and 10 percent, respectively.
"There is an absolute urgency to act," UC Regents Chairman Russell Gould said in a statement. "It is clear that we as regents have to move on this issue. This is not one where we can sit idly by."
Today's action is part of a broader effort to overhaul the UC retirement system. In the spring, UC and its employees began paying into their retirement plan after 20 years without making a contribution. The long hiatus -- prompted because the retirement plan was running a surplus in 1990 -- has now led to an unfunded liability of $24 billion. In the next few months, UC regents will consider proposals to reduce pension benefits for employees who join UC after 2013. They're also considering changing eligibility requirements for retiree health benefits.
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Labor unions have said the proposals will hurt UC's low-wage workers.