Current Issues in Human Resources & Benefits

1. Current Issues in Human Resources & Benefits Judy Boyette Associate Vice President Academic Business Officers Conference April 4, 2005

2. Governor’s Compact is Good News for UC • Returns to predictable increases in funding and fees to accommodate growth and costs • While still tight, there is funding for UC’s basic needs

3. History of Compensation Funding

4. Compact with the Governor • Funding for fixed cost increases: • 2004-05 0% • 2005-06 3% • 2006-07 3% • 2007-08 4% • 2008-09 4% • 2009-10 4% • 2010-11 4%

5. 2005-06 Salary Funding • Regents budget contains 3% funding request for salary increases for staff • Also contains $23.7M for market & equity salary adjustments and health & welfare increases • Guidelines for allocation and distribution of these funds are in progress

6. Pension Reform Proposals • Governor supports changing public pension system from DB to DC for all new hires effective 7/1/07 • Two pending bills in the legislature and one voter initiative underway • UC has testified twice before legislative committees and met with the Department of Finance

7. Impact on UC • Limitations on DC plan employer contributions would make UC less than competitive, especially for faculty • UC has sought flexibility to design new plans to meet market and business needs

8. Retirement Plan Initiatives • Regents approved a new 457(b) Plan, effective October 2004, to enhance retirement savings opportunities • Master Record Keeper and new investment options in 403(b), DCP and 457(b) • Response to public pension reform proposals

9. 140% 130% 120% 110% 100% 90% 80% 2002 2004 2006 2008 2010 2012 2014 2016 2018 Actual Results With No Contributions With Budgeted Contributions UCRP Funding Status Assumes 7.50% Annual Return Campuses Only (no DOE labs)

10. Medical Inflation and UC Costs $1,060 Cost $Millions $723 $ 635 Gross premiums UC contributions $ 567 $358 $347 2010 UC contribution = 68% 2001 UC contribution = 97% 2001 2005 2010

11. Health & Welfare Initiatives • 2003: Health Care Reimbursement Acct. • 2004: Introduced 4 salary bands to equate premium cost to pay level • 2005: Employee costs were generally held at 2004 levels • 2006: Gross premium increases may be about 10%

12. 2004 Monthly Medical Costs for Employees Comparators

13. Staff HR Policies and Operations HRB Strategy: To assure consistent and accountable HR operations across the University in response to The Regents’ request to align location practices with systemwide HR/B policies and labor contracts “Appropriate consistency”

14. UC Leadership Institute (First Program 5/05) • Program incorporates concepts of the People Management Initiative • Systemwide in-residence training program for mid-level managers • Web-based training modules • Ready reference website for managers

15. Staff Advisor Pilot Program • Approved by Regents in January • Two year pilot, effective 7/1/05 • Two staff advisors to two Regents’ committees - Grounds & Buildings and Educational Policy • Initially, past two chairs of CUCSA • Then select from all staff and non-Senate academic employees

16. Questions & Answers