UC-AFT Insider: The High Cost of Portability--Future of UC Pension Fund in Question
University Council-AFT Insider
August 13, 2015
In this issue:
- A Warm UC-AFT Welcome During Move-In Weekend
- Unit 18 Bargaining Priorities Set at Statewide Meeting
- The High Cost of Portability--Napolitano Announces 401(k) Option for New Hires in 2016
- AFT Endorses Hillary—UC-AFT Holds Out for Debate
- UC-AFT Member Spotlight: Mitchell Brown—UCI Research Librarian, Artist and UC-AFT Leader
A Warm UC-AFT Welcome During Move-In Weekend
UC-AFT will welcome new students to campus during Move-In Weekend at UC Berkeley on Saturday August 22, UC Merced on Sunday August 23, and on the quarter campuses in September. We’ll hand out bookmarks, share helpful tips and resources, and provide information about the many ways that lecturers and librarians support students. If you’d like to spend a couple hours with us welcoming new students to campus, please contact your local’s field representative.
Unit 18 Bargaining Priorities Set at Statewide Meeting
After a day of bargaining over Articles 7a, b and c on August 3, members of the Unit 18 bargaining committee met on August 4 to take stock of negotiations and set priorities for a new contract. The committee discussed fair and consistent workload policies, secure retirement benefits for part-time lecturers, shorter time to a continuing appointment and a variety of other mechanisms for stabilizing pre-continuing appointments. Please check the Lecturer Bargaining Blog for ongoing updates and be on the look out for new bargaining support materials soon!
The High Cost of Portability--Napolitano Announces 401(k) Option for New Hires in 2016
President Napolitano has announced that benefits eligible new hires in 2016 will have the option to choose the existing defined benefit pension or a 401(k) style defined contribution plan (DCP). Napolitano is trying to sell the DCP as a “portable” option that will meet the needs of the today’s supposedly mobile workforce. This may be good for the relatively few truly mobile workers, but the cost of portability could be very high. If significant numbers of new hires opt-out of the pension, the new DCP option could undermine the long-term viability of the existing pension fund. The new DCP is particularly troublesome because it was resoundingly rejected when Yudof proposed it a few years ago. And, in recent years, UC and UC employees have increased contributions to the pension in order to ensure it’s long-term health.
We also have to consider the retirement security of future UC employees. We know that 401k type plans are inferior to defined benefit pensions. Pensions out-perform 401k’s because they have diversified, long-term investment strategies, relatively low management fees, and payout options that promote security. In contrast, 401(k) type plans shift investment choices and risk to individuals who often do not have the experience to invest wisely and do not have the choice to retire when the market is strong. One recent study shows higher incidences of post retirement poverty for individuals with 401(k)s, and analysis of another study suggests that we could see a swing back to defined benefit pensions in the future due to their efficiency in terms of cost and returns.
AFT Endorses Hillary--UC-AFT Holds Out for Debate
The American Federation of Teachers, our national affiliate, endorsed Hillary Clinton in the Democratic primary for president of the United States. Despite the politics involved in early endorsement of a candidate considered likely to win, UC-AFT believes the endorsement is premature. UC-AFT has not endorsed Hillary, and we are free to make our own endorsement in the future. In a recent post on the CFT website, CFT President, Joshua Pechthalt, describes the process leading to Hillary’s endorsement, including his own objection, while he lays out an argument for continuing our commitment to robust union democracy.
UC-AFT Member Spotlight: Mitchell Brown—UCI Research Librarian, Artist and UC-AFT Leader
Mitchell Brown is UCI’s Research Librarian for Chemistry, Earth System Science and Russian Studies. He’s also the Scholarly Communications Coordinator in the library’s Scholarly Communication and Management Program. In his spare time, Mitchell draws with pen and ink and he paints plein air landscapes with oils. He recently had his first public show with the Southern California Plein Air Painters Association at the Muth Interpretive Center in Newport Beach. Please read our interview with Mitchell, where you’ll find an intriguing description of why he became a librarian.
The University Council – American Federation of Teachers is an affiliate of the California Federation of Teachers, the American Federation of Teachers and the AFL-CIO.