University of California, Oakland, might reinstate contributions to the system's $43.259 billion pension fund to keep it fully funded and ensure its long-term sustainability. The regents' investment committee plans to recommend details on a contribution schedule in May. The committee gave no estimate of how much the contributions would total, but they could reach 16% of pay. The investment committee would like to begin reinstatement of contributions in 2007.
Mercer Investment Consulting is advising the university regents on the proposal. Segal Co. is providing actuarial analysis.
The plan is currently 110% funded, but without restoring contributions and barring extraordinary investment returns, the funding level could fall below 85% in 2014 and 70% in 2023, according to the investment committee. The regents' objective is to target a 100% funded status with a range between 95% and 110%.
The regents suspended contributions in 1990, and a 2005 actuarial evaluation showed that contributions will be necessary to keep the plan fully funded.