Labor Leaders Criticize Plans for U. of California Retirement Benefits

September 16, 2010

Labor leaders are criticizing plans by the University of California to require a greater employee contribution to the pension fund, the Los Angeles Times reported. With the university projecting a deficit in the pension fund as high as $21 billion, it started requiring payments by itself (of 4 percent of salaries) and of employees (2 percent) this year. Under a plan that could be approved as soon as today, those shares would increase to 5 percent for employees and 10 percent for the university. Future changes could raise the retirement age or create two tiers of benefits, with new employees not receiving everything going to those currently employed. Union leaders argue that many of these changes will have a disproportionate impact on those at the low end of the salary scale.

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