The University of California retirement system faces a shortfall of more than $20 billion

[n2doc]

By Larry Gordon, Los Angeles Times
August 31, 2010


The University of California retirement system faces a shortfall of more than $20 billion, according to a new report, and a task force of administrators and employees is recommending changes to help fix the problem.

The panel, which released its report publicly Monday, proposed such changes as increasing contributions made by the university and employees, raising the minimum retirement age for new hires and reducing some benefits.

Much of the problem with the retirement fund stems from a decision 20 years ago when UC and its employees stopped paying into the retirement system because it was believed to be overfunded, officials said. The university and employees resumed payments this year, but concerns about the possibility of unfunded pensions and post-retirement healthcare continue, according to the report.

Over the next few months, UC President Mark G. Yudof and the university's regents are expected to select and approve some proposals in the report. Some are controversial, and faculty members fear that they could hurt the ability of campuses to compete for new academic talent.

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http://www.latimes.com/news/local/la-me-uc-pension-20100831,0,5013982.story

[aquart]

1. Who took the money?

[Yavin4]

2. Prop. 13

Can't have generous governmental benefits and not pay for them.

And no, electing an action movie star does not solve the problem either.

[sinkingfeeling]

4. Nobody took it. They decided 20 years ago that it was over-funded and stopped paying into it as

health care costs skyrocketed. That makes it under-funded today.

[Ex Lurker]

5. lesson 1. No pension fund is ever overfunded. If they tell you it is, they're up to something nt

[SpiralHawk]

3. Yet another RepuliEconomics FAIL

As usual.

Ya just gotta blow chunks when Republicons claim to be 'conservatives.'

Just more more more of their BS.

[LiberalFighter]

6. If they stopped paying into it 20 years ago does it really have a shortfall?

Who made the decision? UC or the legislature? If UC, why were they given the authority?

[DeschutesRiver]

7. Fine - they felt "overfunded" 20 years ago and quit the funding

And at no point in the intervening years between "overfunded" and "$20 billion dollar shortfall", did any one of them keep an eye on their books, balance sheet and investments in order to catch the point at which overfunded pension began to reverse course (was it long before the huge shortfall or not)? Did they assume that they would now NEVER have to fund their pension plan again, so no need to show any kind of fiduciary duty to the pensioners?

There is something even more crooked behind this scheme than just the corruptness of financial system and what it has done to those who invested in it, like UC. Sorry, but I don't buy that a pension fund like this could believe that an "overfunding" situation would last forever. I would like to know how quickly this "shortfall" came about, as it could have been recent and from a single bad investment. But even that fact would mean that something needs to change for the future in their business model, more than just restarting funding.