SUBJECT:

Update on 1994-95 Budget & Salaries for UC Employees

As you may know, the California State budget-setting process for fiscal
year 1994-95, which begins July 1, is not yet complete. The University
of California is currently working with the Department of Finance and the
Legislature to obtain a budget which meets the needs of the University
while recognizing the serious problems of the State of California.

Until the overall budget process moves closer to completion, it will not
be possible to announce specific plans for the University's salary
programs for fiscal year 1994-95, including proposed range adjustments
and/or merit increase amounts and timing. We will announce salary plans
when more information is available, and we appreciate your patience in
the meantime.

As previously announced, effective July 1, 1994, the University will
restore fully the base salaries of employees who were subject to the
temporary salary reduction during 1993-94. The salary restoration will
be reflected in August 1 paychecks for those paid monthly (July 27 for
those paid biweekly). The July 1, 1994 Capital Accumulation Provision
(CAP) payment for eligible employees who were subject to the pay cut
and/or who participated in the Time Reduction Incentive Plan (TRIP) will
be posted to employee accounts on or after August 1. (CAP eligibility
for exclusively represented employees is subject to the terms of the
applicable bargaining agreements.)

Rogers Davis Assistant Vice Chancellor - Human Resources