Last week, 36 executives employed by University of California threatened to sue UC unless their employer increased their pensions. According to The Mercury News, on Thursday, UC President Mark Yudof and regents Chairman Russell Gould issued a joint statement on that matter, saying that UC is not obligated to raise the pensions. UC now has attorneys on their side in case of a lawsuit.
The executives say that their pensions should be raised because the IRS granted an exception to UC on the mandatory cap on pensions. The IRS granted the exception in 2007, and the executives want their pensions raised retroactively until 2007 and from now on. The IRS cap requires pensions that are over $245,000 a year to be calculated as if a salary was $245,000 a year.
In 1999, the regents voted to calculate pensions on true salary once the IRS granted an exception to UC. For this reason, the executives say that UC is obligated to raise their pensions. In their statement, UC’s president and the regents chairman said that they disagree and say that the vote does not obligate them to now raise pensions. They say that current economic uncertainty prevents the action.
According to The Mercury News, the Berkeley Faculty Association has been circulating a petition against the executives’ request. They are opposed to an increase in pensions because they think the demand in these economic times has damaged the University’s image and the other people employed there.
Source:
UC leaders stand firm against threatened pension lawsuit (The Mercury News)