Thursday, December 30, 2010
Three dozen of the University of California's highest-paid executives are threatening to sue unless UC agrees to spend tens of millions of dollars to dramatically increase retirement benefits for employees earning more than $245,000.
"We believe it is the University's legal, moral and ethical obligation" to increase the benefits, the executives wrote the Board of Regents in a Dec. 9 letter and position paper obtained by The Chronicle. ...
The executives fashioned their demand as a direct challenge to UC President Mark Yudof, who opposes the increase. "Forcing resolution in the courts will put 200 of the University's most senior, most visible current and former executives and faculty leaders in public contention with the President and the Board," they wrote. ...
They want UC to calculate retirement benefits as a percentage of their entire salaries, instead of the federally instituted limit of $245,000. The difference would be significant for the more than 200 UC employees who currently earn more than $245,000.
Under UC's formula, which calculates retirement benefits on only the first $245,000 of pay, an employee earning $400,000 a year who retires after 30 years would get a $183,750 annual pension. Lift the cap, and the pension rises to $300,000. ...
The executives say the higher pensions are overdue because the regents agreed in 1999 to grant them once the IRS allowed them to lift the $245,000 cap, a courtesy often granted to tax-exempt institutions like UC. The IRS approved the waiver in 2007.
Yudof wants the regents to rescind their original approval of the higher pensions, but withdrew his recommendation after receiving the letter. He did so to allow "time for further review by the regents," his spokesman said.
(Hat Tip: InstaPundit.)
According to public salary records, 52 University of California law school faculty earned $245,000 or more in total compensation in 2009.