On Nov. 28, the UC Board of Regents approved an increase in retirement plan contribution rates for both UC and its employees effective July 2013. Currently, employees pay 3.5 percent and UC pays 7 percent. Those rates will increase to 5 and 10 percent respectively on July 1, 2012. Beginning July 1, 2013 faculty and staff will contribute 6.5 percent of their pay and UC will contribute 12 percent to the UC Retirement Plan (UCRP). Rates for represented employees are subject to collective bargaining.
This decision is the latest in a series of actions intended to shore up the funded status of the plan and ensure its long-term viability. The 2013 combined employee and UC contribution rate will, for the first time in more than 20 years, cover the annual cost of the plan. Every year, the plan absorbs liabilities that are equivalent to roughly 18 percent of UC’s covered payroll. While the 2013 contributions will cover the annual “normal cost,” the combined rates are still below the level of the regents funding policy, which is the full annual cost, plus a portion of the unfunded liability. To learn more about these changes, review the news feature on AYSO.