Budget Committee Discusses Pension Liabilities Amid Strong Asset Growth

The University of California's Investments Committee convened on July 13, 2025, to discuss critical financial matters concerning the university's pension plan and investment strategies. The meeting highlighted significant concerns regarding the balance between the university's growing assets and its increasing liabilities.

The discussion began with a member emphasizing the impressive returns achieved over the past two years. However, they cautioned that despite these gains, the liabilities associated with the pension plan have also risen, leading to a stagnant funding ratio. This ratio, which measures the health of the pension plan, has not improved significantly, even with billions in returns. The member stressed the importance of addressing this issue in future meetings, indicating a need for a deeper examination of contributions and liabilities.

Another committee member acknowledged the persistent concerns raised about the pension plan's funding ratio. They noted that while assets have grown substantially, the liabilities have outpaced this growth, resulting in a decline in the funding ratio from 103% in 2008 to 83% in recent years. This decline was attributed to various factors, including a holiday on contributions during a period of strong market performance and subsequent downturns, such as the global financial crisis.

The committee recognized the urgency of these discussions, agreeing to prioritize the examination of the funding ratio and its implications for the university's financial health. The meeting concluded with a commitment to further analyze the relationship between assets and liabilities, ensuring that the pension plan remains sustainable for current and future retirees.