While the pension problems of K-12 teachers dominate the headlines in California, yet another huge unfunded liability is taking shape in the University of California system, home to the state's flagship universities, such as UCLA and Berkeley. The culprits? You guessed it. A huge wave of impending retirements (which will more than triple the current number of pensioners), a tendency towards excessive benefits (more than 2,000 former employees have six-figure pensions, with a former UCLA dentistry professor topping the list at $337,000 a year), and a long history of failing to fund the obligations.
Here's how the AP's Terence Chea reports it:
The adjustments that higher ed will have to make if it adapts to this reality in the near future will be relatively painless compared to those that will be required if the day of reckoning is put off. Here's to hoping that the intellectual class can dig down deep inside and find the willpower necessary for delayed gratification.
The UC system, including medical centers and national laboratories, is scrambling to shore up its pension fund as it prepares for a wave of retirements and tackles a roughly $10 billion unfunded liability.
... "The regents made a serious error and the Legislature made a serious error by not putting money aside for 19 years while accumulating this obligation," said Robert Anderson, a UC Berkeley economist who chairs the system's Academic Senate. "Now we have to pay for it."
The UC system faces spiraling pension costs for 56,000 current retirees and another 116,000 employees nearing retirement.Remarkably, both students and employees in the UC system continue to cry foul every time there is even a whisper of spending cuts from Sacramento. But one thing a college campus can't insulate you from is the cold, hard math underpinning the state's coming pension tsunami.
The adjustments that higher ed will have to make if it adapts to this reality in the near future will be relatively painless compared to those that will be required if the day of reckoning is put off. Here's to hoping that the intellectual class can dig down deep inside and find the willpower necessary for delayed gratification.
Join the conversation