SUBJECT:  Formal Review of the University's Proposal to
                     Extend Supplemental Military Pay and Benefits

It is the University of California's (UC) goal to support employees who serve in the military by minimizing the disruptive effects of their military service on their lives. To that end, UC supplements the difference between eligible employees' University and military pay and continues their benefits for up to 365 calendar days.

In light of the developing movement within California State Government and otherwise to extend Supplemental Military Pay an additional 365 calendar days, UC is therefore recommending the extension of supplemental military payments so UC employees are not confronted with a possible loss of compensation and benefits. To support this objective, the following is proposed:

* Extend supplemental military pay and UC's contribution for health plan premiums for employees receiving supplemental military payments through the end of fiscal year 2003-04 or until the end of the employee's active military duty commitment, whichever comes first. Such additional payments will be retroactive to the first day of unpaid military leave.

UC and military health plans are not equivalent in regard to physician networks, hospitals, and provision of services. Employees whose military pay exceeds their UC salary are ineligible for supplemental military pay and must pay the UC contribution to continue their health plans while on active military duty. To support employees ineligible for supplemental military pay, the following is proposed:

* Pay the UC contribution to health plan premiums for employees who are ineligible for supplemental military pay through the end of fiscal year 2003-04 or until the end of the employee's active military duty commitment, whichever comes first.

Extending supplemental military pay and continuation of benefits through the end of fiscal year 2003-04 instead of extending pay and benefits for an additional 365 days will eliminate the administrative burden of calculating how many days of supplemental military pay employees have received.

Comments regarding these recommendations should be submitted by Wednesday, July 23, 2003, to Policy Development and Quality of Work/Life, at policyworklife@ucsd.edu.

                                                Robert C. Dynes
                                                Chancellor