Tuesday, March 15, 2005
Governor Attacks UC Retirement Plan
I'm probably not the only one who received this email from UPTE-CWA. The following item would make our worries regarding pensions for new employees moot (in the negative sense).
(4) Governor Attacks UC Retirement Plan
Governor Arnold Schwarzenegger has launched a major campaign to outlaw “defined benefit” plans, such as UCRS and PERS, for all public employees in California . Together with Assemblymember Richman from Northridge, he has proposed a constitutional amendment requiring public employers to provide only “defined contribution” plans like a 401(k).
While defined benefit plans rely on the pooled purchasing power of millions, defined contribution plans like 401Ks are individually-based. Under a defined contribution plan, the University caps its contribution to your retirement, and then you either select how to invest your funds or pull them out to use for other purposes. With the volatile stock market and underpaid employees constantly in need of extra money just to make ends meet, many UC employees will end up with little or no retirement funds.
The proposal would apply to workers hired in 2007 and after, but it would affect all of us dramatically. Current employees would be encouraged to move money out of their retirement plans into the new defined contribution plan. The defined benefit plans for those who have retired or were hired before 2007 would not have any new participants and would dwindle in funding with no new participants. UC and other public agencies have used defined benefit retirement plans as a recruitment incentive for jobs that generally pay less than those in the private sector. The amendment would make public employment less attractive and generate revolving door jobs.
Unions including those representing teachers, state workers and many others will join with UC unions to protect our retirement plan. Please stay informed and be prepared to take action.
Ah, the little people. It's so much fun pissing on their parades
when your party controls the whole country.
Of course, the employer often has a lot to say what employees invest in and picks the company which manages the employees' investments. Those who have worked for local contractors such as the Plus Group, TAD and others have seen large fees charged for managing their money and poor investment choices that they have little control over.
Some companies even insist that the employees invest in the stock of the company they work for -- a real bummer because there is no diversification in that case. If the company goes belly up, management gets huge bonuses and employees get what they put in minus fees.
Governors of California have long feasted their eyes on the huge assets of CalPers and UCRS for support of the cash strapped state of California.
So far they haven't been able to take the current assets in these funds, but watch out young people. This is a way to keep you working for life. That's if you manage to pay off your credit card bills.
UCRP may be screwed in the end, just like the rest of us. Oh,
well. Easy come, easy go. You didn't really expect for UC to
support you throughout the rest of your life, did you? UC was
only kidding! Maybe you can make up for it with a new 403b plan
and a day job at Wendy's, but you had better hurry. Time is short.
that 403b retirement plans can make you good income during retirement... "Also when government officials, doctors, nurses etc retire, they will receive pension wages. But is this pension enough to fully cover your living costs? Probably not. The additional income provided by a 403 retirement plan will fill that gap for you, and make you enough and adequate income!"
anyone invested in these plans? do they really help during retirement?