Pension Plan Analysis Reveals $111B Liabilities for University of California by 2025

The University of California's Investments Committee convened on July 13, 2025, to discuss the financial status of its pension plan, revealing significant insights into the growth of assets and liabilities over the past 15 years. The meeting highlighted a stark contrast between the increase in assets and the declining funding ratio of the pension plan.

The discussion opened with a review of the pension fund's growth, which rose from $35 billion in 2010 to an estimated $111 billion in 2025. Despite this substantial increase of $76 billion in assets, the funding ratio has decreased, indicating that liabilities have outpaced asset growth. This discrepancy was attributed to several factors, including pension payouts, contributions from both the University of California and employees, and investment performance.

Over the past 15 years, the pension plan has disbursed $55 billion in benefits to retirees. Contributions from the University and employees totaled $48 billion, with the University contributing $27 billion. Additionally, the plan borrowed $8 billion from its own funds, which further complicated the financial picture. The meeting underscored the importance of maintaining consistent contributions to ensure the sustainability of the pension plan, as reducing contributions during prosperous times could jeopardize its solvency.

Committee members expressed concerns about the implications of rising liabilities, particularly in light of demographic changes that are increasing benefit payments. The discussion emphasized the need for a balanced approach to investment and contributions to secure the pension plan's future.

In conclusion, the meeting served as a critical reminder of the complexities involved in managing the pension fund, with committee members acknowledging the challenges ahead. The committee plans to continue monitoring the situation closely and will hold further discussions to address the ongoing financial dynamics of the pension plan.