UC Benefits Teach-In
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Transcript of UC Benefits Teach-In
UC Benefits Teach-In
April 1, 2006 - South
April 8, 2006 - North
WelcomeIntroductions
Overview
Agenda
1. Welcome, Introductions & Overview2. Benefits Basics3. State & National Perspective
-Break -4. UC’s Pension & Plan of Attack5. Panel - Framework for Fighting Back
& Brainstorm6. Break-Outs for each Union
Si, se puede!
We can protect our UC pension and retiree health!
Benefits Basics
Benefits Basics
Pension
• Different kinds
• Benefits, Contributions,
Funding Level
Retiree Health Insurance
What is a Retirement Plan?
• Monthly income after you retire
• Earn it during your working life
Got Retirement?
Union Non-Union
Source: BLS 2004 Data.
88%
56%
How do Retirement Plans Work?
Contributions Retirement
Investment Earnings
2 Types of Retirement Plans
1. Defined Benefit – benefit is defined in advance--“Pension”
2. Defined Contribution (DC) – contributions are defined, but benefit is not defined.
Defined Benefit (DB)
• Guaranteed benefit
• Contributions are employer paid or shared
• Amount required to fund the plan fluctuates
Defined Contribution (DC)
• Contribution amount is known, but benefit is unknown
• You get whatever there is when you retire
• Employee makes investment decisions, and often decides how much to contribute, if anything
88%
56%
Got Pension?
Union Non-Union
73% DB
16% DB
Source: BLS 2004 Data.
How Much Do You Get When You Retire?
Defined Benefit formula:
• How old when you retire?
• How long did you work?
• What was your salary?
How Much Do You Get When You Retire?
Defined Benefit formula:
Age Factor X
Years on the Job X
Average or Highest Salary =
Benefit
Age factor: %, based on age at retirement, used to calculate retirement income.
UCRP Benefit Formula
Basic Retirement Formula - ExampleRetire @ 60 = 2.5% age factor30 years at UC$12.50 / hour ($2000 / month)$1,500 Monthly Benefit
• COLA – at UC, formula based on inflation
• Reduced if you receive Social Security checks
What is Retiree Health Insurance?
• Health Insurance after retirement (or payment of medical bills after retirement)
• 2 Types:– Pre-65 (pre-Medicare)– Post-65
• May include prescriptions
• May include survivor health insurance
Retiree Health Insurance
National Context• History of “Pay-as-you-go” – not setting aside
money every year (like for pensions)
• New Regulation requires governments to report how much it costs… a lot…$60B for State of CA, $10B for UC
• Some government employers will start to pre-fund
• Retiree health is not vested like pensions are
Retiree Health Insurance
At UC• You are eligible for some benefit after 10
years, full benefit after 20 years employment.
• CNA, CUE & UPTE won retiree health protection in their 2005 contract
• Where not protected by contract, UC can change or stop their contribution to retiree health.
Health Insurance
National Context-Costs are increasing, due in part to large profits in
healthcare industry-Increasing numbers of uninsured-National Crisis, which ultimately will require a single
payer solution
At UC-UC currently pays on average 89% of the cost-UC each year is shifting more costs onto the
employees, especially for family coverage
State & NationalPolitical Context
UC’s Pension & UC’s Plan of Attack
Outline
1. Pension & Benefits at UC
2. Comparisons
3. UC’s Plan of Attack
1. Pension & Benefits at UC
UC Pension
• Benefit Formula
• Contributions
• Funding Levels
UC Pension Benefit
Senior Custodian
Wage (max) $32,028
Retire at age 65 after 15 years at UC
Pension $11,412
UC Contributions History
1980s
Employer: 4% - 16%
Employee: 2-3%
UC Contributions History
1991 – Present: fully funded from investment earnings
Employer: “Contribution Holiday”
Employee: 2% redirected to DC Plan
UC Pension Funding Level
148% - 2001110% - 2005100% - 2009 85% - 2014
* Assumes no new contributions.
2. Comparisons
Pension – Sr. Custodian Retires at Age 65, 15 Years of Service
UCSF CSUSF City College
CPMC* (Sutter)
Cintas (USA)
Wage $ 32,028 $ 38,148 $ 43,056 $ 39,395 $ 21,840
Pension $ 11,412 $ 13,707 $ 12,438 $ 12,673 DC plan
EE ($) $ - $ 1,907 $3,229 ($0 in
04/05 & 05/06)' 0 ?
EE (%) 0.0% 5.0%7.5% (0% in
04/05 & 05/06) 0 ?
ER (%) 0.0% 15.9% ? ? Match
Wage (maximum)
Benefit
Contribution
Comparisons: Funding Levels
• UC Pension: 110%
• CalPERS Public Agency: 87%
• US Public Pensions, Avg.: 85%
3. UC’s Plan of Attack
UC’s Plan of Attack
Overall Package
• Wages
• Pension
• Retiree Health
• Healthcare
UC’s Plan of Attack – Part I
March 2006 Regents Voted• Restart contributions July 2007 (nonrep)• “Shared” – phase in up to 8% each?• Total contribution phased in to 16%
May 2006 Regents Plan to Vote• Specify employee & employer contributions (%)
thru 2010
UC’s Pension Attack – Part I
Senior Custodian
Wage $32,028Pension contribution $2,562
... Like an 8% pay cut!
UC’s Pension Attack – Part II
2-Tier
“Exploring” new plans w/ lesser benefits
Health Insurance Attack
UC may want to cut it’s share of health care costs, from 89% (2005) to 68% (2010).
Retiree Health Insurance Attack
• Reduce / Cost Shift
• 2-Tier – may reduce benefit for new employees
Why now?
• Pension 100% funded until 2009
• Most unions bargain in 2007/08
• Arnold
Let’s slow UC down!
Fight Back!
• CNA, CUE & UPTE won protections for pension & retiree health, with right to bargain & strike
• AFSCME also has protection, because our contract ties us to everyone else
• Reach out to other workers at UC, our Allies and Politicians to stop UC
• Fight together and win!
We can do it! ¡SÍ se puede!
Questions & Answers
Framework to Defend our Benefits
• Educate & Mobilize members
• Make UC slow down so we can fight changes
• Share information and work together
• Reach out to unrepresented Workers, Faculty & Allies
• Politics key to this fight - help defeat Arnold for Governor
Brainstorm
Brainstorm How to Defend our
Benefits
Discuss at UC Union Coalition