Just As Berkeley Rejoices About Its Finances, UC System Revealed To Have $20 BILLION Pension Shortfall

Over the last couple of years, Berkely, the flagship university of the UC system, has come under a fair amount of financial strain prompting cutbacks and outrage among the student body.

But good news! According to its Chancelor, the school is back on track, thanks to hiked tuition and an increase in private donations. He’s apparently “cautiously optimistic.”

But before you get too excited about the state of the UC system, take a look at the big picture.

The LA Times is citing a new report that says the UC pension system faces a $20 billion shortfall (weirdly the article doesn’t acknowledge the panel that produced the report).

Apparently a really silly short-term decision may bear part of the blame:

Much of the problem with the retirement fund stems from a decision 20 years ago when UC and its employees stopped paying into the retirement system because it was believed to be overfunded, officials said. The university and employees resumed payments this year, but concerns about the possibility of unfunded pensions and post-retirement healthcare continue, according to the report.

Get ready for professors to flip their lids if some of the proposals are implemented:

The recommendations include raising the amount, over the next two years, that employees and UC must contribute to pensions, from the current 2% and 4% of paychecks, respectively, to 5% and 10%. In other suggestions, new employees would not be allowed to retire and receive a pension until they reach the age of 55, up from the current 50, and they also could receive smaller pensions based on their years of service than current employees.

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