A group of high-paid U. California executives are petitioning for increases in retirement benefits that amount to tens of millions of dollars, threatening legal action if the UC Board of Regents do not fulfill an agreement made more than 10 years ago.
Of the 36 executives who signed a Dec. 9 letter to the regents, nine come from UCLA, the highest proportion of any UC campus.
The medical center, a multibillion dollar operation, yielded the majority of the UCLA executives. Signees included David Feinberg, CEO of the UCLA hospital system, and J. Thomas Rosenthal, chief medical officer. Both are also associate vice chancellors.
The letter refers to action by the UC Regents in 1999 to lift a cap on the amount that employees can receive in retirement benefits. The UC calculates retirement benefits as a percentage of salary. Right now, the amount can increase until an employee reaches a salary of $245,000.
Some top UC executives make far more than that. Feinberg, for example, made $725,739 in 2009, according to a database compiled by the Sacramento Bee.
The UC Regents agreed to lift the cap pending IRS approval. Approval was granted in 2007, but the increased benefits were never allocated.
The letter calculates the total cost of the increases to the UC at $50.6 million.
The UC claims the resolution in 1999 was never implemented and the cap was not eliminated, according to a letter to the UC Regents from President Mark Yudof.
Roger Farmer, the chair of the UCLA economics department and a co-signer of the letter, said in a written statement that without the policy change, the UC system cannot compete with private institutions and UCLA cannot maintain its edge as a top research university.
“Maintaining a world-class research university comes at a price that includes offering competitive compensation,” Farmer wrote.
He added that his own retirement benefits are not at stake because the policy only affects employees hired after 1994.
Executives from the UCLA Health System declined to comment through a spokesperson. In the letter, the cap is described as “inadequate to attract and retain the best leadership for UC,” and is said to put the medical centers at a disadvantage to private university medical centers.
Career paths, the executives added, were chosen with the expectation of increased benefits.
But the burst of public outrage over the letter points to ill timing. Four days after the letter was sent, the UC Regents voted to cut benefits and raise the retirement age for future hires.
And in November, the regents voted to increase student fees 8 percent in part because of rising costs associated with the retirement fund.
In a statement, faculty and staff members of the UC task force on retirement benefits refer to the executives’ demands as “highly detrimental” and recommend that Yudof table the issue. A posting on a blog operated by UC faculty called the move “selfish greed” and “total oblivion to the public mission.”
Daniel Mitchell, a professor emeritus at the Anderson School of Management and the UCLA School of Public Affairs, said the executives’ letter was a black eye for UC public relations.
“Doing things that suggest that somehow there are special deals being made for higher paid individuals could look bad,” Mitchell said.
“It could endanger what the university wants to do for the whole entire workforce, not just a relatively small number of high-paid individuals.”