UC Benefits Teach-In

1. UC Benefits Teach-In April 1, 2006 - South April 8, 2006 - North

2. WelcomeIntroductionsOverview

3. Agenda • Welcome, Introductions & Overview • Benefits Basics • State & National Perspective -Break - • UC’s Pension & Plan of Attack • Panel - Framework for Fighting Back & Brainstorm • Break-Outs for each Union

4. Si, se puede! We can protect our UC pension and retiree health!

8. Benefits Basics

9. Benefits Basics Pension • Different kinds • Benefits, Contributions, Funding Level Retiree Health Insurance

10. What is a Retirement Plan? • Monthly income after you retire • Earn it during your working life

11. Got Retirement? Union Non-Union Source: BLS 2004 Data.

12. How do Retirement Plans Work? Contributions Retirement Investment Earnings

13. 2 Types of Retirement Plans • Defined Benefit – benefit is defined in advance--“Pension” • Defined Contribution (DC) – contributions are defined, but benefit is not defined.

14. Defined Benefit (DB) • Guaranteed benefit • Contributions are employer paid or shared • Amount required to fund the plan fluctuates

15. Defined Contribution (DC) • Contribution amount is known, but benefit is unknown • You get whatever there is when you retire • Employee makes investment decisions, and often decides how much to contribute, if anything

16. Got Pension? 73% DB 16% DB Union Non-Union Source: BLS 2004 Data.

17. How Much Do You Get When You Retire? Defined Benefit formula: • How old when you retire? • How long did you work? • What was your salary?

18. How Much Do You Get When You Retire? Defined Benefit formula: Age Factor X Years on the Job X Average or Highest Salary = Benefit Age factor: %, based on age at retirement, used to calculate retirement income.

19. UCRP Benefit Formula Basic Retirement Formula - Example Retire @ 60 = 2.5% age factor 30 years at UC $12.50 / hour ($2000 / month) $1,500 Monthly Benefit • COLA – at UC, formula based on inflation • Reduced if you receive Social Security checks

20. What is Retiree Health Insurance? • Health Insurance after retirement (or payment of medical bills after retirement) • 2 Types: • Pre-65 (pre-Medicare) • Post-65 • May include prescriptions • May include survivor health insurance

21. Retiree Health Insurance National Context • History of “Pay-as-you-go” – not setting aside money every year (like for pensions) • New Regulation requires governments to report how much it costs… a lot…$60B for State of CA, $10B for UC • Some government employers will start to pre-fund • Retiree health is not vested like pensions are

22. Retiree Health Insurance At UC • You are eligible for some benefit after 10 years, full benefit after 20 years employment. • CNA, CUE & UPTE won retiree health protection in their 2005 contract • Where not protected by contract, UC can change or stop their contribution to retiree health.

23. Health Insurance National Context -Costs are increasing, due in part to large profits in healthcare industry -Increasing numbers of uninsured -National Crisis, which ultimately will require a single payer solution At UC -UC currently pays on average 89% of the cost -UC each year is shifting more costs onto the employees, especially for family coverage

24. State & NationalPolitical Context

25. UC’s Pension & UC’s Plan of Attack

26. Outline 1. Pension & Benefits at UC 2. Comparisons 3. UC’s Plan of Attack

27. 1. Pension & Benefits at UC

28. UC Pension • Benefit Formula • Contributions • Funding Levels

29. UC Pension Benefit Senior Custodian Wage (max) $32,028 Retire at age 65 after 15 years at UC Pension $11,412

30. UC Contributions History 1980s Employer: 4% - 16% Employee: 2-3%

31. UC Contributions History 1991 – Present: fully funded from investment earnings Employer: “Contribution Holiday” Employee: 2% redirected to DC Plan

32. UC Pension Funding Level 148% - 2001 110% - 2005 100% - 2009 85% - 2014 * Assumes no new contributions.

33. 2. Comparisons

34. Pension – Sr. Custodian Retires at Age 65, 15 Years of Service

35. Comparisons: Funding Levels • UC Pension: 110% • CalPERS Public Agency: 87% • US Public Pensions, Avg.: 85%

36. 3. UC’s Plan of Attack

37. UC’s Plan of Attack Overall Package • Wages • Pension • Retiree Health • Healthcare

38. UC’s Plan of Attack – Part I March 2006 Regents Voted • Restart contributions July 2007 (nonrep) • “Shared” – phase in up to 8% each? • Total contribution phased in to 16% May 2006 Regents Plan to Vote • Specify employee & employer contributions (%) thru 2010

39. UC’s Pension Attack – Part I Senior Custodian Wage $32,028 Pension contribution $2,562 ... Like an 8% pay cut!

40. UC’s Pension Attack – Part II 2-Tier “Exploring” new plans w/ lesser benefits

41. Health Insurance Attack UC may want to cut it’s share of health care costs, from 89% (2005) to 68% (2010).

42. Retiree Health Insurance Attack • Reduce / Cost Shift • 2-Tier – may reduce benefit for new employees

43. Why now? • Pension 100% funded until 2009 • Most unions bargain in 2007/08 • Arnold Let’s slow UC down!

44. Fight Back! • CNA, CUE & UPTE won protections for pension & retiree health, with right to bargain & strike • AFSCME also has protection, because our contract ties us to everyone else • Reach out to other workers at UC, our Allies and Politicians to stop UC • Fight together and win! We can do it!¡SÍ se puede!

45. Questions & Answers

46. Framework to Defend our Benefits • Educate & Mobilize members • Make UC slow down so we can fight changes • Share information and work together • Reach out to unrepresented Workers, Faculty & Allies • Politics key to this fight - help defeat Arnold for Governor

47. Brainstorm • Brainstorm How to Defend our Benefits • Discuss at • UC Union Coalition