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.
Labor unions have said the proposals will hurt UC's low-wage workers.