So last week someone leaked an extraordinary letter to the San Francisco Chronicle. A group of three dozen top administrators at the University of California, writing to the UC Board of Regents, claimed that they were owed millions in new pension benefits, and threatened legal action against the university if they didn’t get them.
The dispute arose out of an obscure provision of federal tax policy that capped the administrators’ pensions. The group claim that the Regents promised in 1999 to boost their benefits if the IRS granted a waiver — that waiver was granted in 2007, but the Regents haven’t acted.
In ordinary times such a disagreement would go unnoticed by the wider public, but these are no ordinary times. California’s state government is in full meltdown, and the UC system is seeing huge budget cuts, slashing staff, and raising tuition to astronomical levels. To raise pensions by hundreds of thousands of dollars a year on the system’s highest-paid executives — the provision only applies to those making salaries above $245,000 — would be both a fiscal and a public relations disaster.
So it’s not surprising that UC hadn’t acted on the request. It’s not even surprising that they’ve rejected it again today. What is surprising is the language they’ve used in doing so.
The public statement, released jointly today by Board of Regents Chairman Russell Gould and UC President Mark Yudof, says that the Board’s action a decade ago wasn’t “self-executing” — that it gave the Regents permission to raise pensions on the group, but didn’t obligate them to do so. Given the state of UC’s finances, it would be imprudent to do so now. And here’s the kicker:
Months ago, the Board retained counsel to assist the University in the event this position should need to be defended in the courts. While those who signed the letter are without question highly valued employees, we must disagree with them on this particular issue.
Translation: We’re lawyered up. Do what you gotta do.