SUBJECT:  Regents' 2001-02 Salaries and Benefits Proposal for UC Staff

For your information, attached is a summary of the November 16th Regental action regarding salaries and benefits for University of California staff. This action constitutes the approval of a budget proposal for the University of California that will ultimately require the Governor's and the Legislature's approval.

Questions regarding this proposal, may be referred to Jonnie Craig-Winston, Director of Policy Development and Quality of Work/Life, at jcraig@ucsd.edu or (858) 534-9659.

                                                Rogers Davis
                                                Assistant Vice Chancellor

REGENTS ACT TO IMPROVE SALARIES AND BENEFITS FOR UC STAFF

The UC Board of Regents today (Nov. 16) approved a proposed 2001-02 budget for the University of California that would significantly improve wages and benefits for UC employees by increasing staff salaries that lag the marketplace and by expanding UC's child care program.

In a separate action, The Regents approved a new program to expand eligibility for UC retirement benefits to certain "casual" employees.

Today's actions represent the second year of a multi-year effort by UC to improve its ability to recruit and retain talented employees.

"As one of the largest public employers in the state, we recognize our obligation to find innovative ways to attract and retain excellent staff," said UC President Richard C. Atkinson. "Today's actions take a significant step forward by offering better wages for staff employees, a new child care initiative to make UC more attractive to working parents, and retirement benefits for thousands of casual employees."

Salary increases

Among the key employee wage and benefit improvements contained in The Regents' 2001-02 budget proposal are faculty and staff salary increases as follows:

* Average 2 percent employee salary increase

* Merit increases for eligible employees

* 2 percent funding increase to improve salaries for staff and non-faculty academic positions where pay levels currently lag the market. Part of the funding for this item is within the budget "partnership" between UC and Gov. Gray Davis, and part of it would be funding above the partnership amount.

* 1 percent parity increase to keep faculty salaries market-competitive

Actual distribution of salary increases varies by compensation program and is subject to collective bargaining requirements.

Earlier this year, the university supported a $19 million augmentation in the 2000-01 state budget to raise the salaries of lower-paid employees. As a result, staff salary rates equal to or below $40,000 per year were increased 2 percent beyond the regular salary program, and staff salary rates between $40,000 and $80,000 were increased 1 percent beyond the normal program. (These increases varied based on the results of collective bargaining for union-represented employees.)

With their approval of the 2001-02 budget proposal, The Regents requested another $24 million to continue moving staff wages closer to market averages.

Expanded child care services

Another significant proposal in next year's UC budget is the expansion of child care services. The university has identified child care as a high-priority area and requested $20 million in one-time state General Funds to expand its services through the construction of new facilities.

Currently, the university serves approximately 2,000 children through these programs. However, there is a list of approximately 2,000 children waiting to enter UC child care. The funding requested in the budget would enable UC to accommodate an additional 1,000 children each year.

Expanded child care for the children of university staff, faculty and students is a crucial component of the university's recruitment and retention strategy.

Casual employment reforms

Another initiative approved by The Regents is a program to expand UC Retirement Plan (UCRP) eligibility to certain casual employees who work enough hours to qualify, with exceptions for per diem, temporary pool and student employees. Casual employees are essentially workers who are hired to work on special projects or help with peak workloads for a limited term.

Effective Jan. 1, 2001, a limited-term employee will become a UCRP member after accumulating 1,000 hours on pay status during a rolling 12-month period. Because eligibility for health and welfare benefits is based in part on UCRP membership, this UCRP change will result in an expansion of health and welfare eligibility for this group. UCRP membership will be effective the first of the month following the attainment of the 1,000-hour threshold.

In addition, there will be a supplemental allocation of UCRP service credit in the future to individuals employed at UC on Jan. 1, 2001, and who have previously worked for the university in a casual appointment. The details of this element are still being developed and will be announced in the near future.

Also, the university is proposing granting career employment status to casual employees who pass the 1,000-hour threshold. This proposed change must be negotiated with UC unions.

Retirement plan improvements

At their May and September meetings, The Regents discussed the possibility of making other improvements to UCRP, including increasing the "age factors" used in determining the amount of monthly retirement benefits faculty and staff receive. However, after consultation and discussions involving Regents and various segments of the UC community, it has been decided that further analysis must be completed on the impact of all the proposals, and that the results of a comprehensive UCRP asset and liability study are needed. UC Human Resources and Benefits expects the retirement age factor proposal to be submitted to The Regents in January 2001.

The Regents did act today to improve the age factors for safety officers -- police and firefighters -- in order to maintain a competitive position with cities and counties the university competes with for talent.

In the previous formula used to calculate a retired safety member's monthly retirement check, the age factor started at .020 at age 50 and increased to a maximum of .025 at age 55. The new retirement improvement sets the retirement age factor at .030 when retiring at age 50 or older, for safety members who retire Jan. 1, 2001, or later.

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