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“I think this year’s higher tuition is just the beginning of bailouts by students and their parents. The students had nothing to do with creating this, but they are going to be the piggy bank to solve the problem in the long term.” That is Lawrence McQuillan, author of California Dreaming: Lessons on How to Resolve America’s Public Pension Crisis, speaking to Jack Dolan of the Los Angeles Times. His article, headlined “UC is handing out generous pensions, and students are paying the price with higher tuition,” shows the full dimensions of the problem.
In 2016, more than 5,400 UC retirees received pensions in excess of $100,000 and the number of UC retirees collecting six-figure pensions increased 60 percent since 2012. Nearly three dozen former US bosses received pensions in excess of $300,000 last year, four times as many as in 2012. Those include former UC president Mark Yudof, a man of little if any distinction. As Dolan notes, Yudof held forth at the University of California for only seven years, one on paid sabbatical, during which he bagged his $546,000 salary, and another in which he taught only one class per semester. A two-percent cost of living raise last year brought Yudof’s pension to $357,000, more than some scholars and scientists who spent decades at the UC.
Dolan finds the UC pension problem to be self-inflicted. “In 1990, administrators there stopped making contributions for 20 years, even as their investments foundered, leaving a jaw-dropping bill for the next generation — which has now arrived.” As it does, UC bosses do their best to keep the data secret while jacking up tuition. They denied public information to the non-profit California Policy Center and claimed that a low-level worker lost a spreadsheet. The Los Angeles Times requested pension information in February but the office of UC president Janet Napolitano took until June to deliver. That is typical for Napolitano, a former Arizona governor and federal Department of Homeland boss. On her watch, the UC wasted $504 million on a computer system and Napolitano’s office maintained a secret slush fund of $175 million.
Meanwhile, as Lawrence McQuillan explains, “the current public pension system is unsustainable. Switching to 401(k)s going forward is a better approach to retirement security that will help spare our children and grandchildren from being crushed by future pension costs.”