The Dig: UC Executives Threaten To Sue for Their Retirement

This story came out a couple of days ago, and so we really should have jumped on this sooner, but we’ve managed to catch the full picture and updates since the story broke and going into the new year.

A couple of day ago, SF Chronicle broke with this story about a significant number of UC executives who had written a letter to the Regents and President Yudof, threatening to sue the Regents because the new retirement plan passed by the Regents reduced their benefits.  The Group of 36 executives are mostly executives in the medical centers of the UC, along with investment and treasurer executives.  However, they are also joined by a number of professors, the most prominent of such is Dean Christopher Edley, of Berkeley Law.

I don’t believe that the letter was meant to be distributed widely to the public, and was really directly addressed to the Regents and the President, which is why this has become bigger news.  The UC executives argue that they were promised retirement benefits proportional to their salary – which goes beyond a cap instituted by the IRS limiting retirement benefits.  The UC, back in the 90s, did get an exemption from that cap for these executives, but the new retirement plan apparently does not continue that exemption.

The cost of the executives request is 51.5million dollars upfront to make the changes retroactive, and 5.5million dollars a year going forward.  This money may involve student fee dollars, as many retirement funds will.

SF Chronicle then reported that for now, Yudof is against the increases, although UCOP has not released yet an official statement or response to the letter.  There was talk about giving the Regents “more time to review”, the Regents will ultimately have the final decision in this, although Yudof and UCOP will inevitably play a large factor.  Gov-Elect Brown, Speaker Perez, and State Senator Leland Yee have all spoken out against the letter.

Dean Edley has defended his position and support on the letter, SF Chronicle has mentioned him as one of the leaders of the Group of 36.  Regent Blum has mentioned compromise, and Regent Kieffer mentioned that the issue would not be heard by the Regents until at least March.  Faculty Representative to the Regents, and Academic Senate Chair Dan Simmons was relatively aggressive in his opposition to the letter, saying that the Group of 36 fails to recognize the public university in dire straits.



2 responses to “The Dig: UC Executives Threaten To Sue for Their Retirement

  1. Gov, Brown’s inauguaration $100,000: Cal consultants $3,000,000. University of California Berkeley (Cal) ranking drops. In 2004, for example, the London-based Times Higher Education ranked Cal the second leading research university in the world, just behind Harvard; in 2009 that ranking had tumbled to 39th place.
    When UC Berkeley recently announced its elimination of baseball, men’s, women’s gymnastics, women’s lacrosse teams and its defunding of the national-champion men’s rugby team, the chancellor sighed, “Sorry, but this was necessary!”
    But was it? Yes, the university is in dire financial straits. Yet $3 million was somehow found by Chancellor Robert J Birgeneau to pay the Bain consulting firm to uncover waste, inefficiencies in UC Berkeley (Cal), despite the fact that a prominent East Coast university was accomplishing the same thing without expensive consultants.
    Essentially, the process requires collecting, analyzing information from faculty, staff. Apparently, Cal senior management believe that the faculty, staff of their world-class university lacks the cognitive ability, integrity, energy to identify millions in savings. If consultants are necessary, the reason is clear: the chancellor has lost credibility with the people who provided the information to the consultants. Chancellor Robert J Birgeneau has reigned for eight years, during which time the inefficiencies proliferated to $150 million. Even as Bain’s recommendations are implemented (‘They told me to do it’, Birgeneau), credibility, trust, problems remain.
    Bain is interviewing faculty, staff, senior management and academic senate leaders to identify $150 million in inefficiencies, most of which could have been found internally. One easy-to-identify problem, for example, was wasteful procurement practices such as failing to secure bulk discounts on printers. But Birgeneau apparently has no concept of savings: even in procuring a consulting firm he failed to receive proposals from other firms.

    Students, staff, faculty, California Legislators are the victims of his incompetent decisions. Now that sports teams are feeling the pinch, perhaps the California Alumni, benefactors, donors, will demand to know why Birgeneau is raking in $500,000 a year while abdicating his work responsibilities.

    Let there be light.

    The author, who has 35 years’ consulting experience, has taught at University of California Berkeley, where he was able to observe the culture and the way the senior management operates.

  2. Perhaps almost important as this story is the fact that it was not immediately picked up and further investigated by the many (many) large media outlets that, when it comes to the University of California’s stated need to raise tuition and cut educational resources for the public, give the UC such prominent (often front page) coverage. Indeed, the Los Angeles Times has so far remained entirely mute on this important story, while the New York Times saw fit to simply bury this story in the middle of another story, and gave it a minuscule paragraph.

    This event also allows us to better hear the unstated words of those many UC administrators and faculty members who incessantly shout at the public about the need to pay huge salaries to these “top” UC people: We don’t give a damned about this university system when it’s in the hands of the public, and we’re going to drain it dry by means of the “free market” (and thereby show concern only for ourselves and our families and close friends) until this entire university system has been completely wrested from the public and put securely into the hands of private corporate ownership, where it will then serve only us ideological managers and the youth in our circles who will follow us.

    In short, the still public University of California (with the aid of corporate-owned media, as this story shows) is going about its own business of pursuing increasingly bold strategies to more fully privatize a corporation that has proved to be too socially valuable (read powerful) to be left in the hands of a public that is actually demanding, “Let There Be Light.”

    And if the public continues to remain spectators as the University of California goes about this business as usual, in the not-too-distant future we may well see the entire UC system becoming the educational counterpart to “public” country clubs, golf courses, and airports—where the only public actually using these facilities are the those relatively few amongst us with plenty of leisure time and plenty of money.

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