The UC Board of Regents last week authorized renewed employer and employee contributions to the UC Retirement Plan starting July 1, 2009.

The contributions would be the first in 18 years, closing out a "holiday" during which investment returns have been the plan's only source of new money. In recent years, however, and especially this year, financial markets have weakened -- and UC officials say that without renewed contributions, the plan's assets will soon fall below 100 percent of obligations.

Net assets totaled $48.1 billion at the end of the 2006-07 fiscal year. The 2007-08 report is due out in November.

Amounts unknown

The regents are not expected to decide until early next year how much the contributions will be. However, for employees, the university's plan the first year is for a simple transfer of funds that would not result in employees receiving any less take-home pay.

This would be accomplished by redirecting the mandatory deduction for the employees' defined contribution plan, or DCP. For most employees, this is about 2 percent.

Every employee has control over his or her DCP account -- deciding how to invest it. This will not change; these accounts are employees to keep.

However, starting July 1, the DCP contributions would be redirected to the retirement plan -- and employees do not have control over those investments.

The regents said the university will contribute as much or more in matching funds.

The UC Office of the President began talking about renewed contributions in 2006 and had hoped to start them in July 2007. But the state has so far not put up the money to pay for UC's share, and there is no certainty the state will do so next year.

Nevertheless, UC is moving forward with the restart, subject to collective bargaining where applicable.

"The market returns on UCRP have declined over the 2007-08 year, due to the performance of the financial markets," officials said in a Sept. 12 letter to employees. "In addition, we are seeing the impact of delaying the restart of contributions."

More on the UC Retirement Plan.