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Top 10 questions from web chat with President Yudof

President Mark Yudof recently held a web chat with UC faculty and staff to answer their questions on a variety of university issues. The March 2 event, moderated by Staff Advisors Penny Herbert and Kevin Smith, can be viewed online. Following is a selection of key questions and President Yudof’s responses from the chat, edited for publication. 

 Q: A group of UC Riverside students has proposed that the university adopt an alternative tuition model. Is UC considering their idea?

Yudof: I just met with the young man who proposed this, and conceptually it’s something that interests me a great deal. In effect we would lend students the money for tuition and then have the loans repaid after graduation on an income-adjusted basis. So if you had trouble getting a job, or if you were a public servant and you weren’t well paid, then the loan might be forgiven or the payback might be delayed.

But it’s a tricky business. We don’t have access to tax returns. So how do we know whether you’re driving a taxicab or the head of a hedge fund? And where would the money come from to keep the university going while we’re waiting for the repayment? So I think it’s a keen idea; though probably not practical in its current form it could be made practical.

Q: Will the Regents take a position on or endorse any of the state tax initiatives?

Yudof: I am hopeful that they will. There are pros and cons to each of the revenue enhancers. The millionaires’ tax has money that’s designated for higher education, but the legislature could pull back other funds. I don’t say they will, but that’s a concern. The Governor’s proposal is more balanced; but it’s a temporary tax and I wish it weren’t [so] that we didn’t have to face this issue in just another few years.

If it turns out that we can get a favorable agreement on a multiyear funding deal with the state by endorsing the Governor’s current proposal, that’s what I will recommend to the Board. So I think it’s likely the Regents will endorse one or more of the measures and it just depends how the politics plays out in the next few months.

I also hope our staff will get behind these revenue measures once we know what’s on the ballot and what’s helpful to the university. I think we need to ensure that they pass.

Q: How can staff best support the UC budget advocacy efforts?

Yudof: We need to keep the pressure on, so I would say get on our UC for California advocacy list so we can send you a message that says there’s a very good development, there’s a very bad development. Contact your local legislator, send an e-mail, write a letter. I think that helps. I don’t guarantee results, but the legislators do feel the heat if they get thousands of communications.

Q:  What are your views on the recent student protests and what are your hopes for the investigative report from Cruz Reynoso?

Yudof: I want a report that tells me what went wrong, and I do view it as something went wrong. There may be extenuating circumstances. I understand that. But our job is, if the protesters are peaceful, to find the least harmful and stressful ways of ameliorating the situation and, unless Justice Reynoso tells me otherwise, it didn’t look like we picked the least harmful thing to do.

So we’ll get the report about what happened and Justice Reynoso will give us a series of recommendations about how we can deal better with such protests in the future. I’m looking for guidance. I want to protect our students and their right to protest. I think it’s very constructive. On the other hand, they have no right to shut down our buildings, no right to throw bottles at our police officers, no right to shut down a meeting of a public board like the Board of Regents.

Q: What is the prospect of a cost-of-living adjustment or merit raise for policy covered staff in 2012?

Yudof: I’m committed to an additional three percent for merit raises for next year. Now there are some concerns. When we give a three percent raise, it’s really an instruction to the campuses to take their staff budgets and add three percent to it for non-represented staff. So they have to find the money, and in very difficult times. But that’s my intention.

Q: What is the University of California doing to control health insurance costs?

Yudof: I think we have controlled some costs already. We have the Health Net Blue and Gold Plan, and that saves us a lot of money and it’s saved employees a lot of money, more importantly; and [it] provides good coverage. We have some campuses where it’s a little more difficult getting the providers to sign up for it, but we’re working on that.

We’re looking at self-insurance. I don’t claim to be an expert, but I think we’d be foolish not to look at it. We’ve held our costs down, mostly in single digits when almost everybody else is going up in double digits. I’m sorry that employees are paying more, but I think we’ve handled it about as well as we possibly can.

Q: What is the impact of Governor Brown’s pension reform on our UC retirement benefits?

Yudof: The Governor’s proposal actually shares many characteristics with what has already been approved for the University of California Retirement Plan. Employees would pay more under the governor’s proposal. Ours remains wholly a pension plan, not even partially a defined contribution or 401(k)-type plan. And one major difference is, ours is in place; his is not. And I’ve said that to him.

The way the governor’s proposal is currently constructed, it would seem to apply to everyone. But I just can’t believe they would try to push this for the University of California where, for better or worse, we seem to have settled these issues. What would be the point? I predict it’s not going to happen to UC employees, but we’ll be watchful.

Q: Will there be a maximum cap for the employee contribution to the UC retirement plan?  What’s going to happen over the next couple of years?

Yudof: That’s hard to know. We’re hitting it pretty hard and I feel badly about it because, de facto, it’s a pay cut. On the other hand, the last thing in the world I want is for your retirement not to be there when you retire.

Q: Given that private sector employees pay much more to their retirement, doesn’t it make sense to consider moving to a 401(K) type vehicle?

Yudof: I have a couple of reactions. First, we can’t do that for existing employees certainly without their consent, just as a legal matter. So we’re locked in for the vast bulk of people to a defined benefit program. Second, we probably have some subset of employees who would prefer something like a defined contribution 401(K), and I’m willing to look at that.

The third thing is I am one of the skeptics of 401(K)s. People by and large have not been very good at managing these things. There are some skilled people who have been very good, but I think I’m not one of those people. And I want to be real careful. It is paternalistic, but I think many employees would prefer to have the pros do the investing. And if they don’t, that’s fine — they can take it on; but I don’t know that it’s a good fit for everyone.

Q: Can you comment on the UCPath System, which is being set up across UC to handle HR and payroll? Will this yield the savings UC initially anticipated?

Yudof: In my experience, it never saves you as much money as the people told me at the beginning. I’m just hoping it saves us enough money that it will be worth the trauma and expenditures and so forth that we’re all going through. I do know we have more personnel and [have] put more money into the administration of our payroll system than other universities, the private sector and other public sector entities. We need to have efficiencies. We need to save money and I think, over time, we will.

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