Update on 2007 Total Compensation
In September 2005 the Regents approved RE-61, reaffirming UC's commitment to competitive total compensation—pay, benefits and retirement—for all UC employees. The Office of the President has provided the following information to assist employees in understanding the components of total compensation for the coming year, including health insurance costs for 2007.
Medical Plan Increases
As has been previously announced, the cost of healthcare is rising in California and across the country. As a result, medical plan premium costs for UC will increase by about 11.7% in 2007; this is comparable to the 11.9% increase experienced by CalPERS. UC will pay a large part of the cost increase, but employees as a group will also pay more in 2007. The rates are not yet final, and the amount employees will pay depends on their salary, medical plan choice and dependents. Medical plan increases may be subject to collective bargaining for represented employees, as required.
UC will continue to pay the overwhelming majority—more than 86%, on average—of the cost of employees' medical coverage in 2007, including much of the cost of their dependent coverage (especially for children). CalPERS, by comparison, pays 77%-82% of the cost of the statewide HMO. UC's proposed funding for 2007 will rise to $673 million, or $50 million more than in 2006, an 8.1% increase.
In addition to increasing its medical plan funding in 2007, UC remains committed to offering plan choices and access to high-quality care. UC is not reducing medical plan coverage, and these key features of our healthcare program are not changing:
- Choices, so employees can manage their own costs and find an appropriate medical plan.
- Tax advantages with pre-tax premiums and the voluntary Health Care Reimbursement Account (HCRA), which will include a new debit card feature, eliminating the need to file a claim for many expenses (starting in 2007).
- Free dental and vision coverage, fully paid by UC.
- Contributions set according to pay, to protect employees in the lower pay ranges from the full impact of premium increases.
UC received some very welcome news this year. The final state budget for 2006-07 included a 4% funding increase for salaries and benefits. This was 1% more than the 3% that was expected under the budget agreement with Governor Schwarzenegger. However, keep in mind that individual increases depend on salary program criteria and a number of other factors.
As was recently announced, the salary program 2006-07 is as follows:
- Policy-covered staff employees — Of the 4% increase, 3.5% will fund a merit pool effective October 1, 2006, for employees in open range salary structures. The remaining 0.5% will be used to make salary adjustments to address significant market competitiveness and equity issues. (For Senior Managers, the merit pool will be 2.5% with 1.5% to address salary equity priorities.)
- Represented employees — Salaries for represented employees are governed by collective-bargaining agreements.
- Academic employees — Faculty and other academic personnel received merit increases depending on their merit review cycle effective July 1, 2006. Additionally, they will receive a 2% salary range adjustment (COLA) effective October 1, 2006.
UC's 2006-07 salary program is in line with the Regents' 10-year plan to bring salaries, on average, to market levels and to help rebalance UC's total compensation package.
UCRP Contribution Restart
The UC Retirement Plan (UCRP) is a significant part of the total compensation package. Unlike most public institutions, UC has enjoyed a long "funding holiday" since the early 1990s, during which time neither UC nor employees have had to make contributions. Soon, however, contributions, both from UC and from plan participants, will be needed in order to keep the plan fully funded and protect future benefits.
To minimize the impact of restarting contributions, UC's intent for the initial restart is to shift the mandatory contribution employees currently make to their DC Plan accounts (just under 2% for most participants) and redirect it to the UCRP. (The percentage varies depending on whether there is coordination with Social Security.) Contributions are scheduled to restart July 1, 2007, subject to the availability of funding, the budget process, and collective bargaining for represented employees. There will be no reduction in take-home pay due to the restart of pension plan contributions, and, most importantly, UCRP benefits are not being cut.
Learn More About the Benefits of Belonging
Visit At Your Service to learn more about your benefits and the value of your total compensation. Here are some helpful tools:
- At Your Service Online provides personalized estimates of your UCRP retirement benefits based on current salary and work hours. Employees must log in with SSN or username and password for access.
- Retirement Plan Benefit Estimator allows you to model various scenarios (pay, age, retirement dates) to estimate your retirement benefits.
More information on 2007 medical plan costs will be included in your Open Enrollment materials, available in October. (Open Enrollment is planned for November 1-21, 2006).
Please contact your Benefit Office in Campus Human Resources or Healthcare Human Resources if you have questions.
Campus Human Resources, Benefits Services
Phone: (310) 794-0830 | Fax: (310) 794-0835
UCLA Healthcare Human Resources
Phone: (310) 794-0500 | Fax: (310) 794-0620