Concern About Outsourcing of UC Retirement Plan Administration

On September 1, Joe Kiskis sent the following letter:

Mary Croughan, Chair
Universitywide Academic Senate
University of California
1111 Franklin St., 12th Floor
Oakland, CA 94607-5200

Dear Chair Croughan,

The Council of UC Faculty Associations is deeply concerned by the process being used to make a decision on the outsourcing of UCRP benefits administration. While this decision will have a long-term impact on the lives of most faculty members, our present understanding is that the plans will not allow the vast majority of faculty stakeholders any meaningful input to the process. The decision will be made by a small number of University executives, and, contrary to its customary open and representative processes, the constraints imposed on the Senate mean that its recommendation will be formulated by a very small number Senate members in systemwide Senate positions. While we are confident that those few Senate members with access to useful information will strive to represent the interests of all faculty to the administration, we cannot accept such a closed process as being an adequate implementation of shared governance.

We are not aware of any serious attempts by the administration or the Academic Senate to inform faculty about the possible outsourcing or the associated decision process. To the best of our knowledge, no information has been provided that could be the basis for informed discussion. In addition, the timeline is highly compressed. As we understand it, the final executive decision will be on October 1, 2008. The formal Senate position will be finalized at the September 24 Academic Council meeting with the possibility of some information on that agenda item being available about one week prior to that. The bulk of this process, including the determination of the Senate position, is taking place while most campus-level faculty review processes are still in summer hiatus.

Any meaningful version of shared governance would have to include time for campus-level discussions and enough information to allow those to be informed discussions.

In its July 15, 2008 letter, the Academic Council laid out five principles to use in deciding whether to outsource benefits administration: justification, quality of service, security of confidential information, costs, and benefits design. We share the Council’s concern that “outsourcing may adversely affect benefits administration,” and strongly support these principles. To them, we suggest that stability be added. It does not serve the interests of plan members to have the administrator of the plan change every few years whether it be due to a new RFP issued by the UC administration or due to churning in the industry from mergers, acquisitions, or corporate failure.

We will expect the Senate to use the principles in determining a recommendation to the administration and the administration, in turn, to use them as guidelines in a final decision. In addition, and most importantly, since present plans do not include an opportunity for wider faculty discussion, we expect the Senate to justify its recommendation with an information-based report to faculty that covers each of the principles and the administration to report to the faculty on its final decision with an analysis that addresses each of the principles.

When University functions are privatized, the potential for conflict of interest exists. Thus if a decision to outsource is made, we expect the University to disclose all other financial arrangements that it has had or will have with the selected vendor.

Finally, the Council of UC Faculty Associations will also contact Associate Vice President for Human Resources and Benefits, Judy Boyette, to pursue our meet-and-discuss rights in this matter. In particular, we will request evidence that the final executive decision is based on the principles presented by Academic Council.

Joe Kiskis
Vice President for External Relations
Council of UC Faculty Associations

cc: CUCFA faculty association members

Leave a Reply

Your email address will not be published. Required fields are marked *