Campus News

Retiree health benefits

To preserve the retiree health-benefits program for current and future retirees, UC must evaluate options to manage costs.

October 19, 2017

By Public Affairs

Like all employers, however, UC must balance the benefits it offers with the costs of those benefits.  Under the current model, UC spends hundreds of millions of dollars annually for retiree health benefits. Unfortunately, current and projected cost increases of UC’s health benefits for retirees are greater than inflation and growing faster than the university’s budget. UC’s commitment to these benefits has not wavered, but the current model is putting the financial stability of the program at risk.

To preserve the retiree health-benefits program for current and future retirees, UC must evaluate options to manage costs.

In early 2018, the UC Office of the President will convene an advisory work group with representatives from a wide range of groups to explore potential strategies and develop options for UC leaders to consider. As they look for solutions, members of the work group will examine programmatic and plan design changes that will allow us to ensure the program’s overall financial sustainability. The work group is expected to deliver its recommendations by June.

This work only pertains to retiree health benefits and does not affect University of California Retirement Plan pension benefits.

No funding or programmatic changes regarding UC’s retiree health benefits will take place until 2019, at the earliest. The benefits offered to retirees for 2018 reflect UC’s current funding policy, with a continuing contribution of at least 70 percent of the cost of retiree health-care benefits.

I understand how important good health benefits are to our retirees, and to the ability of faculty and staff to plan for their financial futures. Please be assured we will keep you informed about any proposed changes to UC’s retiree health benefits.