Letter to the Regents re: SCR 52 (UC Retirement Plan Governance)
CUCFA sent the following letter to all the Regents as well as the Chairs of three Academic Senate committees, the University Committee on Faculty Welfare, the UCFW Task Force on Investment & Retirement, and the University Committee on Planning & Budget.
November 16, 2007
Regent's Chair Richard C. Blum
1111 Franklin St., 12th floor
Oakland, CA 94607
Dear Chair Blum,
Recent history of financial management in the country demonstrates the value of openness, widely available information, and broad participation as protections from the risks associated with insular processes. With these values in mind, the California Legislature enacted SCR 52. It calls on the UC Regents “to provide for shared governance of the University of California Retirement Plan by including trustees representing the employer and the faculty and staff plan participants...”
The Council of University of California Faculty Associations (CUCFA) supported this legislation. We now ask the Regents to take immediate measures to implement it. The most effective and straightforward response to SCR 52 would be the creation of a UCRS governing board that includes faculty and staff representation. The advantages of such a board include creative input from a diversity of viewpoints; open discussion of investment goals and risk management; widely available background material, analyses, and rationale for decisions; and increased confidence in the integrity of processes. In addition, a true governing board with employee representation would not be in conflict with the provisions of HEERA that are designed to avoid “direct dealing.” A delegation of Regental authority to a board is permitted and would not constitute a consultation with employee groups that circumvents their representatives.
The selection of employee board members should be delegated to the respective employee groups: Senate faculty, staff, and employees with non-Senate academic titles. In the case of Senate faculty, the selections should be made by the Academic Senate.
The open process requested by SCR 52 is the kind of collaborative approach that has always been a great strength of the University. This shared governance sustains the quality of the University and its employees. On the other hand, hidden decision making with narrow input has put the University in some of its most difficult positions relative to the trust that the people of California place in their university and the high expectations they have for it.
To maintain full funding of UCRS, it is likely that employee contributions will resume in the near future. Thus a timely response is important. In the sixteen years that have passed since employees last contributed, standards for fiduciary responsibility have increased. Stakeholders have higher expectations for participation, oversight, and transparency. A trusted, well-governed UCRS will only become more critical over time.
Thus, CUCFA calls on the Regents to provide for a good-faith implementation of the intent of SCR 52. The creation of a well-supported UCRS governing board with representative members from staff, faculty, Regents, and UCOP would fulfill this responsibility.
Respectfully yours,
Joe Kiskis
Vice President—External Relations