Simmons did say at the forum that he opposes changing from a defined-benefit to a defined-contribution plan and he re-stated that position during our small meeting with him, but he also gave himself some wiggle room, saying that there were arguments in favor of the DC option and that UCOP was now exploring the possibility of a combination of the two. I'm not convinced he won't get bought out in the end. More disturbing still was the idea of co-ordinating with Medicaire, which I don't quite
understand (Gayle understands: Gayle, please explain!)
We were able to tell him, at the smaller meeting, that many of us felt betrayed by the conduct of the Senate leadership, esp. Mary Croughan, and that things must change, and he kind of admitted that we were right, but then he started in about how this year, the Senate leadership is just great (even tho' Powell wrote that stupid letter to AAUP about the walkout) and will be much more open to our feedback. I didn't have time to point out tohim that at the forum a few minutes before, he'd said that the Senate had ALREADY expressed its support for starting our contributions to the pension fund at a HIGHER rate than the one proposed by UCOP! Already endorsed it, even tho' I, for one, have heard nothing about it! They are obviously still making important decisions without consulting or even informing the rest of us!
Most disturbing of all was the admission that some of the student fee increases will be used to pay for our salaries and benefits. Divide and conquer. He seemed positively gleeful when he pointed out that no state legislators have spoken out in opposition to the fee increases, but after the meeting I wrote to my contact in Leland Yee's office, who told me that Yee and others oppose the fee increases.
One more thing: Simmons told us about the origin of the Gould Commission. He said that at first, Yudof wanted the Academic Senate to be responsible for researching and developing proposals for the future of the University, but that Mary Croughan told him that the faculty was incapable
of doing it!
I think we should propose a resolution at the upcoming Senate meeting calling for the removal of Croughan from the Gould Commission. I think we need to send a signal to the new regime that we will not tolerate Senate leaders who do not believe in faculty governance.
B
***
I've been hearing good things about the smaller meeting with Simmons. If my info is correct, however, he remarked at that time that Yudof simply had had no idea that the furloughs and fee hikes were going to cause so much trouble and it was just because he didn't know us.
I think it's important for us to remember, when we hear this kind of apology, that Yudof has a long history of behaving in this way. Granted, he may have learned nothing from those experiences.
I found the afternoon forum a little on the disturbing side. These are the things I thought I heard:
1. I thought I heard Simmons say that contracts and grants were a revenue flow into the university, but could no longer be relied upon to help fund retirement. I said, "I thought I heard you say....but since when have contracts and grants not also cost the university a good deal of money to support?
2. I thought I heard Simmons say that one virtue of defined contribution retirement options was that they would actually serve many faculty really well. Those of us who remain here till our fifties are kind of stuck here--they would lose so much retirement if they quit now that it wouldn't be worth it to go elsewhere. But for young people who don't have permanent positions, defined contributions are really great. (My translation: if more and more faculty are lecturers without security of employment, this will all work out just fine.)
3. I thought I heard it said that 80% of UC's retirees had never had to contribute a dime to the retirement fund--as though this were remarkable and possibly slightly unjust.
4. I thought I heard it assumed that additional revenue would not be coming from the state, so that none of the alternatives being considered by the Task Force will include restored public funding. I believe this is what we are saying is a basic problem with the Gould Commission.
5. When asked how the Task Force members viewed the problem of how to recruit faculty without good benefits, they replied that they would be doing market studies to see whether the strategies they're thinking about would reduce UC's competitiveness.
6. When asked how broad their search for new approaches would be, they said they would be studying the way other universities have dealt with retirement costs. [This brings no joy to my heart. I would like UC to begin a turning of the tide whereby other universities couldn't get away with this stuff anymore. The attitude is, why should we have anything better than other universities?
7. I thought I heard a flat denial that the UC Retirement fund investments had been mismanaged. Market forces, like the bursting of the tech bubble, or like right now, have of course made things very difficult, but we actually lost less money this year than some institutions to whom we like to compare ourselves. Our strategy became MORE conservative in the early 2000's, not less. The reason the fund was at one time at 143% of the money needed to honor commitments and is now funded at about 100% isn't anything important. It never needed to be at 143% and actually shouldn't have been, it wasn't handled properly.
8. I thought I heard that they would report only to Yudof and their proposals would just be advisory. So they don't even have to go to the Regents, presumably, if Yudof doesn't like them.
Does this sound like what other people heard? Any additions, corrections, clarifications?
I think:
1. This Task Force is a very bad thing. They've been given lots more time to do their job than the Gould Commission. If the latter proves to be a face-saving device for all concerned and we don't have to worry about it, I get the feeling this task force will be working in the back room planning plenty of damage. There was a jovial, let's make-jokes-about-how-tough-the-times-are attitude that made very clear (to me) that the Task Force is working entirely within the restricted imaginings we don't want to accept. Tell me if I'm wrong.
2. We need to let the Task Force know of these concerns and alert other campuses.
What do you think?
***
Thanks so much for this summary. I was unable to attend the meeting, so I found it most helpful--and, sadly, not at all surprising. People pushing to switch from defined benefit to defined contribution systems always have the same line--it will be better for all but those close to retirement who don't have time to make a killing in the stock market.
Well, we heard that when Bush tried to privatize Social Security, which even his duplicity could not achieve. And we saw between March and December 2009 how quickly those stock market gains could evaporate. One small compensation for the lifelong sacrifice of earning capacity that public employees endure is the assurance that they will be able to sustain much of their modest incomes in retirement. In the past the best and most competitive universities have picked up both the individual and the university contributions to retirement programs, which I suppose one could say the UC system did during the years when faculty made no contributions. But in those very years there were several in which the lack of COLAs left the incomes of those without merit bumps in those yeare diminished. It is total balderdash that the loss of retirement funds does not suggest mismanagement. The fund should be compelled to disclose the extent of its investment in derivatives.
On the basis of your summary, I suspect you are right that this "task force" is a bigger deal actually than the Gould (Ghoul) commission, and therefore one that needs to be called into the spotlight in every way that we can.
M
***
Aranye's summary of yesterday afternoon meeting made me sad (most striking indeed: why can it not be that UC leads the way, as if it would be so terrible if UC offered a more excellent education more affordably). The following report in Chris's blog makes me angry. I cannot help but conclude that it has much to do with the composition of the commission - faculty of medical schools (Croughan, Powell) and law schools (Edley) leading the way. If the commission had more scientists (incl social scientists) and humanists, I cannot imagine that the conversation would be the same--maybe I am romanticizing scientists, or maybe not. Those who understand that the driver of much if not ALL of what we do is true idealism and love for education AND the research that we conduct, would not dare to say that we are "romanticizing" UC. One should send the Sharon Farmer's article in The Independent to Edley, and tell him that this is the sentiment of many. Edley has no idea that all of us work extra hours and more than what we are asked to do written in any rule-book, if there was one, because we love our profession, because we truly romanticize our profession. Alienate the faculty, try to drive them to work "efficiently" by telling them individual meetings with students are not "economical", many faculty will for the first time find the red binder and read up what the rules are: then Edley, see what you will get as a result.
You know how you can best recognize a mediocre school or mediocre department? Measure the degree of bitterness among faculty, or the lack of enthusiasm, or how much they talk down their institution. We are not quite there yet, but one change is stunning. If you asked me 6 months ago what I thought of the University of California, I would have said it's the most beautiful institution that I know, and I am lucky to be here. Ask me now. I would say, a wonderful body of faculty and student led by corrupt politicians and money makers.
S
PRT I
ReplyDeleteThe joy of trying to be straight forward with people is the receipt of anonamous comments from folks like B,M and S. I suppose it's my fault for not being clearer, but these people misheard and/or misinterpred most of my comments.
Here's some clarification.
1. I am neither opposed to or in favor of moving to a defined contribution plan (DC) for new employees, yet. What I did say is that I believe that one of the great strneghts of the University is that we employ bright young people, support them for a career, and the DB plan is an incentive to stay at the University through one's 50's, and then provides a graceful opportunity to retire with financial security when the time is right. On the other hand, people who come to the University with the expectation of moving on, or people who come late in their careers, would favor a DC plan because of its portability and the fact that the DB plan is most vauable to people with long careers. The issue is which kind of behavior should the post-employment compensation scheme favor.
A DC plan may well be better for lecturers who do not spend their whole career at UC. Unlike "M's" comment, I don't think that is an incentive for the University to hire more lecturers and fewer regular faculty, but it is probably better for someone who is a lecturer. That is one of the issues in the mix.
I did not say that anyone was betrayed by the conduct of Senate leadership, especially Mary Croughan who in my opinion ranks as one of the best Senate chairs that we have been fortunate engough to have. What I did say, which I believe Mary has said, is that when Mark Yudof first proposed that the faculty take the lead in addressing the future of the University, both Mary Croughan and Mark Yudof later concluded that the faculty did not have the resources to undertake that exercise and that a broader coalition of interests was necessary for the effort to have credibility. You can exercise your own judgment about the wisdom of that view, but it is the origin of the Gould Commission.
My view about that activity is that if the commission comes up with good recommendations for the future of the University, we will all benefit. I hope the Senate will take an active role in formulating its own ideas and communicating them into the process. In addition, the Senate needs to be prepared through active attention during this year, to address recommendations that come from the workgoups and the Commission itself. I am hopeful that this will be an iterative process.
Regarding the idea that student fee increases pay for salaries and benefits. Of course they do. Salaries and benefits are part of the operating budget of the University and part of the cost of instruction. There are limited sources of funds, the state budget being one, student fees being another. When the state budget has gone down, as it has, we either close down operations, stop paying people, or raise fees to meet costs. Obviously the better solution is to convince the Governor and the Legislature to restore and increase. However, blaming Mark Yudof, me, Mary Croughan, or anyone else for the problem will not help do that. We are all working together to find solutions. Casting stones will not motivate the legislature to act to increase funding. In fact, the various disruptive activities are only harmful because they divide the house and make us look foolish. It may be easier, more simplistic, and satisfying to vent at Mark Yudof, but it doesn't advance the cause of the University.
Continued in Part II
PART II
ReplyDeleteA resolution to remove Mary Croughan from the Gould commission is crazy. She is one of the faculty's strongist allies, she has a great deal of respect and credibility with the Regents, and most importantly, Mary brings great wisdom and knowledge to the proceedings. We all should be extremely grateful for her willingness to devote her condsiderable energy to this enterprise.
As to Yudof having no idea that furloughs would be so difficult, to his credit he started from the proposition that salary cuts or furloughs should be applied across the board equally to everybody It was the Senate that called for exceptions with respect to people compensated by non-state funds. The Senate also advocated furloughs rather than salary cuts because, while the furlough for faculty who will do their work in any event is really a salary cut, as to staff the furlough at least means time off. That is what created complexities and differnt treatment. What Yudof now recognizes is that furloughs cannot be continued, if that is at all possible.
Contracts and grants are a revenue flow to the University. In 2008 contracts and grants accounted for 23 percent of total revenue. In the absence of contributions, any salary supported by contracts and grants creates obligations for pension benefits from UCRP, but the burden of providing that compensation falls solely on the plan, rather than on the funding source. Only if and to the extent the University initiates contributions, will contracts and grants fund the obligations that the salary portion creates.
True, something like 80 pecent of current UC employees have never had to contribute to the retirement plan. At the same time, on average, all employees receive compensation in the form of future benefits with a present value of 17 percent of salary. That's a tremendous benefit.
I don't understand M's point number 4. The University is seeking more revenue from the State, including contributions to UCRP. That's good. I hope we are successful, but we need everyone to be advocating for that funding. Again, hurling criticism at Mark Yudof or others does not advance that cause.
For an analysis of UC's investment performance and the Senate position with regard to UCRP, read the paper at http://www.universityofcalifornia.edu/senate/reports/evaluating.ucrp.3.30-09.pdf. You can take issue with that analysis and I would be interested in detailed criticism of what is written there. Is M's criticism of the overfunding of UCRP a complaint that it should have done worse so that contributions would have been required all along? The investment success of the plan has given the State, the University, and all of the employees a free ride for nearly 20 years. Is that bad?
M's conclusion that the task force is bad: private industry and public institutions across the country have abandoned DB plans in favor of DC plans and cash balance plans. There is tremendous pressure on UC to do the same. The pressure comes from the State, it comes from some Regents, it comes from people circulating an initiative to do just that. The Task Force is taking a deliberative approach to the question. We cannot ignore the issue, nor can we ignore the problem of the funding levels of UCRP. The task force is going to every campus to try to educate people and lay these problems on the table, then make recommendations. What's the better approach if you don't like the task force? Yudof and senior managers could do this on their own, or they could consult broadly about the choices. I like the latter approach and I think that is what is going on.
Finally, S is confusing the Post Employment Benefits Task Force with meetings with Gould Commission workgroup chairs. Since I was not at those meetings, I'm not going to comment.
Dan Simmons
My view about that activity is that if the commission comes up with good recommendations for the future of the University, we will all benefit. I hope the Senate will take an active role in formulating its own ideas and communicating them into the process.
ReplyDeleteIt is better to convince the employees about the post retirement benefits. Actually they need the schemes and benefits after the retirement only.
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