Tag Archives: underfunded

Retirement: Who Knows?

I am 63, going on 64. I had thought I would retire at about 65.5. But who knows.

I received a email with the subject heading: Post-Employment Benefits Local Forum.

Just the phrasing scares me. What the hell are Post-Employment Benefits? Is that some attempt to change the definition of “retirement.” Because that’s what they will be talking about “retirement” benefits.

Apparently the UC Pension plan is in significant trouble; and I am of course concerned that these troubles may affect me significantly. That I may have to work longer than anticipated, and that even if I do, I may received reduced benefits, in terms of money and medical.

But something is afoot and it is hard to know what to think, or plan or feel.

This language appeared in the email:

The University’s long-term liability for retiree health benefits for current and future retirees is also projected to increase, from $13 billion today to nearly $26 billion by 2018. In other words, the liability is increasing at a rate of more than $1.5 billion per year. Governmental accounting regulations now require UC and other employers to include this liability in their financial statements. Such a significant liability could affect UC’s credit rating when borrowing money for campus buildings, hospitals and other projects.

If in fact the liability associated with the pension fund might inhibit
the University’s power to build buildings, support hospitals, as well
as unnamed other projects, whatever those might be, then they may do
something drastic. One does not have to look far to get some sense of
how businesses treat their employees these days, and more it more it
appears the University is a business.