FOR IMMEDIATE RELEASE
Friday, Nov. 15, 2002
Paul Schwartz (510) 987-9924
UC REGENTS APPROVE ADDITIONAL RETIREMENT FUNDS FOR
SECOND CONSECUTIVE YEAR TO HELP OFFSET DISAPPOINTING STATE
FUNDING FOR EMPLOYEE RAISES
In an effort to mitigate disappointing 2002-03 salary increases
due to limited state funding, University of California Regents
today (Nov. 14) approved additional retirement funds for eligible
UC employees by way of a special retirement account.
"All of our faculty and staff work very hard to maintain
UC as a premier educational institution and they deserve to
be recognized accordingly," said Judy Boyette, associate
vice president for human resources and benefits. "Since
we are only able to give modest raises on a systemwide basis
this year due to the state's budget deficit, we wanted to
try to find additional forms of rewarding people financially.
And even though this doesn't increase employees' incomes immediately,
it does give them a financial boost later on."
Due to the recent economic downturn and resulting decline
in state revenues, UC received significantly limited state
funding for 2002-2003, which only provided UC with enough
funds to offer administrative employees 1.5 percent raises
systemwide. This is the second consecutive year that UC received
less-than-expected state funding for employee salaries.
The special account, called a Capital Accumulation Provision
(CAP), will put the equivalent of 5 percent of the employee's
salary into a separate retirement account in the University
of California Retirement Plan (UCRP) where it will earn a
specified rate of interest (currently 7.5 percent). Employees
will have access to the funds when they retire from or leave
UC. UC employees who are active members in the UCRP on April
1, 2003 will be eligible for the CAP.
This is not the first time UC has offered employees a CAP
program. In fact, UC Regents also approved a CAP last year
to help offset similarly disappointing salary increases. The
2001 CAP provided eligible employees with 3 percent of salary,
at a current interest rate of 7.5 percent.
In the 1990s, when the state's budget was under similar
pressure, eligible employees also received CAPs to offset
disappointing salary increases. In the last 10 years, UC has
offered five separate CAP programs.
To be eligible to receive the CAP accrual credit approved
today, employees must be active UCRP members on April 1, 2003.
This would include UCRP members on sabbatical or approved
leave of absence. Disabled, retired and inactive members would