UC regents shore up retirement funds — and a key executive’s pay
The University of California regents took steps Thursday to shore up the university’s badly underfunded retirement plans by raising the amounts employees and the university will be expected to contribute to them.
FOR THE RECORD:
UC Regents: An article in the Sept. 17 LATExtra section about actions by the University of California board said that $250,000 of a $410,000 raise for UCLA hospital executive David Feinberg would come from private donations and the rest from hospital revenues. UCLA officials say that all of Feinberg’s salary increase will come from a privately endowed $10-million fund and that hospital revenues temporarily used for the extra salary will be repaid by that endowment.
But even at a time of such difficult financial decisions, the regents in a separate action antagonized some critics by boosting the annual compensation of UCLA’s top hospital executive by $410,000, to about $1.3 million. Officials say $250,000 of the raise for executive David Feinberg will come from private donations.
Meeting at UC San Francisco, the regents unanimously approved a plan that will raise contributions to the pension and retirement health plans over two years to 5% from the current 2% of employees’ paychecks, and to 10% from 4% of payroll for the university. The change will take effect quickly for about half of UC’s 115,000 employees, including its faculty, but must be negotiated with its unionized employees.
More tough choices are ahead as UC tries to fill an estimated $21-billion liability gap in its retirement plans. Until this spring, neither the university nor its employees had made any contributions to the plans for 20 years.
In December, the regents are expected to review proposals for even more extensive changes, including one that would create a less generous program for employees hired after 2013 and boost the minimum retirement age to 55 from 50. Labor unions are protesting that idea, saying it would hurt lower-wage employees the most by linking pensions to Social Security.
UC President Mark G. Yudof said he would look into concerns about fairness but said the retirement funds must be shored up. “It is impossible to let everything go along as it is without jeopardizing the long-term security of the people who work here and the people who will work here in the future,” he told the regents.
The political heat surrounding the issue was evident Thursday as about 60 union members protested, briefly interrupting the meeting. No arrests were made.
The labor demonstrators contrasted the pension decision with other actions the regents took on executive compensation. First, the board approved $3.1 million in bonuses for medical center executives that are linked to efficiencies and improvements in patient health. That money, which comes from hospital revenues, will be distributed among 37 UC hospital leaders across the state.
As part of that group, Feinberg, UCLA’s hospital system chief executive officer, will receive a $210,000 bonus. But in a more divisive matter, UCLA officials also received the regents’ approval to give Feinberg an extra raise of about $410,000, boosting his total compensation to more than $1.3 million.
UCLA Chancellor Gene Block said Feinberg was doing an excellent job and was being wooed by other employers. “Keeping this team together is essential,” he said. Block said that he has more than $7 million in private pledges toward a $10-million endowment that will provide $250,000 of the raise and that the other $160,000 will come from hospital revenues.
Three regents, George Marcus, Charlene Zettel and Lt. Gov. Abel Maldonado, voted against the raises. Reached later by telephone, Maldonado said such increases were unseemly at a time of cutbacks at the university. He said he also worried that funding hospital salaries with donations could set a bad precedent.