UC Retirement Plan Contribution Increases

To: UCSC Academic and Staff Employees

From: Pamela Peterson, Assistant Vice Chancellor, Academic Personnel; Charlotte Moreno, Assistant Vice Chancellor, Staff Human Resources

This is a reminder that you may see a change in your next paycheck as both employees and UC start contributing more to the UC Retirement Plan.  In September 2010, the UC Board of Regents approved contribution increases as part of a larger effort to put UC’s retirement benefits on a financially sustainable footing.

The higher employee and employer contribution rates start with July earnings and will be reflected in paychecks beginning August 1, 2011.  Contributions for most employees increased 1.5 percentage points going from roughly 2.0 percent of pay through June 30 to 3.5 percent of pay.  UC also increased its employer contribution from 4.0 percent to 7.0 percent.  The increased contribution rates apply to active members of the retirement plan and are subject to collective bargaining for unionized employees.

Every year, the retirement plan incurs costs that are equivalent to about 17 percent of annual pay.The increased contributions are part of UC’s strategy to ensure the long-term viability of the plan and to address a $14 billion unfunded liability.  More information about the UC Retirement Plan and the Regents’ strategies for reducing the plan’s unfunded liability is available on the Future of UC Retirement Benefits website:  http://ucrpfuture.universityofcalifornia.edu/.