How you will be affected by a lump sum payment

Highlights

  • UHPA recently received the written salary proposal from the Governor.
  • The offer provides a 1% one-time lump sum cash bonus of a faculty members’ base salary.
  • The offer will impact faculty members differently based on your employment date.

If you were hired Before July 1, 2012

Faculty Members hired before July 1, 2012 will have ERS deductions taken from the lump sum cash bonus. The lump sum cash bonus will count toward the “high three” years of salary for purposes of calculating retirement benefits.

If you were hired from July 1, 2012 to the present

Faculty Members hired July 1, 2012 to the present shall have no ERS deduction taken from the lump sum cash bonus. The lump sum cash bonus will not count toward the “high five” years of salary for purposes of calculating retirement benefits.

Other Faculty Compensation

There are no increases in minimum annual salaries; lecturer fee schedule; non-credit fee schedule, and overload rates per credit hour.

UHPA’s view on the Governor’s 1% lump

This is an unacceptable proposal from the Governor and continues to devalue the work of faculty members. UHPA’s bargaining team has been firm in its opposition to this paltry sum and has expressed this directly to the Governor’s representative.

FAQs about the Hawaii ERS Unfunded Liability

In recent weeks, we have seen a great deal of information regarding the dramatic increase in the unfunded liability of the Hawaii ERS (Employeesʻ Retirement System).  We understand the concerns and wanted to provide some perspective on this situation to ensure that you, as beneficiaries, understand what happened and how it is being handled.  Please look through the Q&A below and let me know if you have any questions or concerns.

 

  • What is the Hawaii ERS unfunded liability?

    • The ERS unfunded liability is the amount of money, at any given point in time, in which future retirement payments exceed the amount of funds currently available to pay for them.
  • Why did the Hawaii ERS unfunded liability balloon this year by roughly $3 Billion?

    • According to the ERS actuarial valuation report, there were two main factors contributing to the dramatic increase in the unfunded liability:
      • The ERS Board voted to decrease the investment return assumption from 7.50% to 7.00%, which subsequently increased the unfunded liability by $1.7 billion
      • Increasing life expectancy, because people are living longer in retirement, resulted in an increase of $1.2 billion
    • These changes caused the ERS funding ratio to drop from 61.2% funded to 54.7% funded.
  • What are the implications of the increase in the Hawaii ERS unfunded liability?

    • The roughly $3 Billion increase in the unfunded liability increased the funding period from 27 years to 66 years to full funding.  Statutorily, the employer contribution rates must be reviewed for adjustment once the accrued liability exceeds 30 years.  There is legislation attempting to address new contribution rates during the 2017 legislative session.
  • Did the Hawaii ERS Board know the ramifications of decreasing the investment return assumption from 7.50% to 7.00%?

    • Yes.  Wesley Machida, the State Budget & Finance Director, is an Ex Officio voting ERS Board Member.  He confirmed that the ERS Board was apprised of the impact that decreasing the investment return assumption would have on the unfunded liability, but chose to proceed anyway.  Due to a strong trend of lowering return expectations across the industry, the ERS Board has been slowly decreasing the investment return assumption, beginning at 8.00% and slowly moving down to 7.50% over a five year period.  What had previously taken five years to accomplish, was done all at once by the ERS Board, which had negative implications on the unfunded liability.
  • Did the Hawaii ERS Board have to take this approach and decrease the investment return assumption from 7.50% to 7.00%?

    • No, it was not necessary to decrease the investment return assumption in such a dramatic fashion.  The ERS Board was making progress in decreasing the investment return assumption gradually, ensuring that the accrued liability did not exceed thirty years.  That one action changed the entire ERS landscape and is forcing the legislature to make decisions on how to find the funding.
    • In December 2016, CalPERS, the California Public Employeesʻ Retirement System, took a similar action by decreasing their investment return assumption from 7.50% to 7.00%, but decided to spread that decrease over a three year time period.  This is an approach the ERS Board could have taken.
  • What are the ramifications of the action taken by the Hawaii ERS Board?

    • $385 Million is required to meet the funding obligations for the ERS due in large part to the actions by the ERS Board.  Those actions are forcing the legislature to look at yet another area in need of funding, taking away from competing interests, such as pay raises for public employees.
  • Why is the Hawaii ERS in this fiscal dilemma in the first place?

    • Going back to the 1960ʻs, the Legislature raided roughly $1.6 Billion to help make ends meet in other areas.  If those raids were not made, the ERS would likely be above 90% funded.
  • Should you be concerned about your retirement payments?

    • No, not at this time.  It is foolish to believe that the everyone eligible for retirement benefits would seek payment all at once.  As long as the required payments towards your retirement benefits are made, there should be no issues in meeting the retirement obligations.  Think of the ERS unfunded liability as you would your mortgage payments.  As long as you make the necessary monthly payments, there are no issues and you continue to live in your home.

UH Faculty #HeroProf Protects Hawaii’s Future: Kevin Bennett

UHPA Faculty Heroes Campaign Continues

UHPA is continuing its “Heroes” campaign to promote the role and value of UH faculty. Our core message is a simple but powerful reminder: investing in Hawaii’s future starts with investing in faculty. We shared this message on broadcast television and in social media at the start of the legislative session, and will now continue our campaign with a newly produced spot.

 

Broken Promises

Kevin Bennett, Ph.D., Associate Professor of Biology at UH-Manoa and a UHPA member, is featured in the new spot. You may recall that UHPA shared last year that Dr. Bennett was recruited from Arizona State University in 2013 with an offer letter promising him a magnetic resonance imaging (MRI) to carry on his molecular medicine research and to establish an MRI research center in Hawaii.

A Hero with Tenacity

After relocating, however the UH reneged on its promise. UHPA stepped in to defend Dr. Bennett, filing a prohibited practice complaint with the Hawaii Labor Relations Board and was willing to pursue litigation. After months of negotiation with UH administration, justice prevailed and Dr. Bennett finally obtained his promised MRI equipment.

Making Hawaii Healthier

Today, we are proud to showcase Dr. Bennett and his work on diagnostic research for the early detection of kidney disease, which is a major problem because of our prevalence of both diagnosed an undiagnosed diabetes in our islands.

Share This with Others

Please share this story of victory with your friends and family as a reminder that faculty need to be treated with dignity and respect because investing in faculty is truly an investment in Hawaii’s future and a vitally component for us to move forward as a state.

Ige should invest in UH faculty

By Eric Denton, Karla Hayashi and Lynne Wilkens

Gov. David Ige’s State of the State address did not offer anything new or substantive, and did not provide any concrete solutions to actually move our state forward.

We heard the governor say our state “must tap our greatest our resource, our people, to find our way to the next great economic transformation: the development of an innovation sector.”

This translated into investment in the University of Hawaii Cancer Center and the HI Growth program to encourage high-tech entrepreneurs.

But what about investment in “our people” who are contributing to our economy now? We believe our state can create a strong, vibrant economy when there is mutually respectful dialogue with the ones who are actively contributing to our local economy today.

As faculty, we were pleased to see the governor’s budget narrative acknowledge the UH is “a productive economic engine for the State of Hawaii.” As the governor’s budget narrative points out, UH faculty attracted an average of $314 million in extramural grants and contracts per year over the last decade (fiscal years 2005 to 2014).

The governor’s proposed Early College Program can be successful if there are faculty to provide the instruction Hawaii students need. Investing in UH faculty will allow us to attract and retain high-quality faculty, who teach our students at the 10 UH campuses across the state, and who conduct research that lead to practical, concrete solutions to relevant issues in our state.

Instruction and research are two vitally important legs of the UH tripod that support the third leg — valuable service to the community. Innovative, groundbreaking research by UH faculty allows students to learn more, gain hands-on experience, and be better equipped to take their place in the world when they graduate.

Many of the faculty research programs support the governor’s long-term goals, including increasing local food production. For example, UH faculty have secured a USDA grant for the Molokai Native Beginning Farmer Program, and through private foundations, the Molokai Homestead Gardening Program is mentoring 40 Hawaiian homestead families in gardening and nutrition.

On Hawaii island, a successful public-private partnership between UH-Hilo and Chef Alan Wong has made the school’s Adopt-A-Beehive program the focus of worldwide attention as it promotes the importance of honey bees for local and global sustainability.

Another innovative program at UH-Hilo, funded by federal dollars, shows students how to utilize excess waste and underutilized agricultural products to promote local sustainability and serve niche markets to support successful businesses.

Faculty dedicate their lives to instruction and research that benefit the Hawaii, using funds that do not rely on the state’s coffers. There must be a reciprocal relationship: The state of Hawaii gains and needs to invest in faculty. We cannot shortchange faculty or undermine their work; otherwise, many will be recruited by universities in other states that are investing in their futures.

It’s time for our state to step up and support faculty, the people responsible for making a better tomorrow possible.

As the state refines “the people’s budget,” as the governor called it in his speech, we hope he and legislators will adopt a collaborative process involving UH faculty. We hope the revised budget is not only “responsible” but also strategic, providing the greatest return for Hawaii’s people, now and into the future.

The new budget must reflect truly visionary leadership that sees the great potential of University of Hawaii and invests in the human capital needed to create a viable future for our state, our economy, and our citizens. Imagine what more we could do to drive our local economy if we had better support for faculty.

Eric Denton is a religion professor at Kapiolani Community College; Karla Hayashi is director of Kilohana: The Academic Success Center in UH-Hilo’s English Department; Lynne Wilkens is co-director of Biostatistics & Informatics Shared Resource at the UH Cancer Center and president of the UH Professional Assembly, the faculty union.

Lunch & Learn (on campus!) on buying a home or refinancing in Hawaii

UHPA,  via our partners at HomeStreet Bank, are excited to present “Home Buyer Confidence” on April 5, 2017 at Manoa Campus Center 307, from 11:55am-1pm.  There is no cost to attend and this is for UHPA members only. Light lunch and refreshments will be provided, courtesy HomeStreet Bank.

Why should you attend?

Are you worried about rising interest rates in 2017? Prepare for what’s next by getting the most pertinent and current home purchase information.

Empower yourself by understanding key mortgage factors that allow you to purchase real estate.

Confidence and peace of mind are critical when you are about to make the largest financial decision of your life. You will get exposure to simple tips directly from a mortgage lender to help you move forward with your home purchase.

You might save a lot on your mortgage

UHPA members have demonstrably saved thousands of dollars with using the HomeStreet Bank programs.  In 2016 alone, there were 6 loans made to UHPA members with a total savings of $10,684. Over the life of the program, savings have totaled $144,343.

What you will learn:

  • How to build your down payment
  • Loan program availability based on your financial situation
  • How mortgage rates affect your monthly affordability
  • How to prepare and compete: Prequalification vs. PreApproval
  • What lenders look for in different property types like Single Family with Accessory Dwellings, condos, multi-unit

Agenda:

  1. Role of your mortgage lender and loan officer
  2. Saving for down payment
  3. Loan program availability
  4. Mortgage payment affordability strategies
  5. Preparing to compete in the real estate marketplace
  6. Property red flags

Seating is limited! Reserve your seat and lunch now.

Campus Center room 307 has a finite number of seats and we anticipate this seminar will be very popular. Seating is available on a first-come, first-served basis and must be reserved in advance so if you plan on attending please do so immediately.

Not a member yet? Joining is quick, easy, online, and won’t cost you extra.

SB 406, Relating to Collective Bargaining

The Senate Committee on Judiciary and Labor
and
The Senate Committee on Higher Education and the Arts
Thursday, February 2, 2017
1:15 PM, Conference Room 224

RE: SB 406, Relating to Collective Bargaining

Attention: Chairs Gilbert S.C. Keith-Agaran and Kai Kahele, Vice Chairs Karl Rhoads and
Michelle Kidani and Members of the Respective Committees

The University of Hawaii Professional Assembly (UHPA) urges the joint Senate committee to support passage of SB 406 that amends Section 89-6 of the Hawai‘i Revised Statute to create bargaining unit 15, allowing full-time graduate students employed at the University of Hawai‘i to collectively bargain.  

Graduate students are essential to instruction, research and mentoring undergraduate students that contributes to the overall success of the University of Hawai‘i. They are in the full sense of the term, employees, with continuing access to positions based on job and academic performance.

When representing faculty, UHPA has worked with graduates students, and on occasion, have provided guidance.  The current University of Hawai‘i policy governing Graduate Students does not provide the proper protections of this group of employees.  Collective Bargaining would allow this group the following:

  • Negotiation of grievance procedures with access to arbitration
  • Protection from arbitrary and capricious behavior
  • Negotiation of salary, wages and benefits

While UHPA is unable to represent Graduate Students, our experience indicates this group of student employees needs the ability to advance its interests in establishing appropriate conditions of employment and treatment in the workplace.

UHPA supports the passage of SB 406.

Respectfully submitted,

Kristeen Hanselman
Executive Director

Federal Restrictions on Travel to Conferences and Meetings in Hawaii Eliminated

Senator Schatz has prevailed in adjusting the Federal OMB guidelines to ensure that faculty members are able to travel more freely and to conduct meetings and conferences on the islands.  This should help eliminate the barriers for many faculty members that impeded collaboration.

2017 Senate Committee Chairs and Vice Chairs Announced

UHPA has published the most recent 2017 Senate Committee Chair and Vice Chair assignments within our Legislative Action Center

Show Senate Committee Assignments Now

Governor says no salary increase for faculty

On October 31 UHPA and UH engaged in negotiations on a successor contract. The Governor presented his “apparent” opening offer of a 0% salary increase the first year of the new contract, a 0% increase in the second year, and an EUTF flat rate that will not increase with rising premium costs by the health insurance carriers.This is a significant change from the current practice of the employers’ contribution being established through a % of the total premium cost.

The Governor’s proposal negatively impacts all faculty by diminishing your buying power for at least a two year time period. It devalues the work of faculty members and is a break from the recent past where Governors, both Republican and Democrat, gave wage increases to faculty and other public employees.

The UHPA bargaining team expressed their concerns regarding the failure to support faculty members and the probable consequence of faculty leaving the University and the difficulty in recruiting quality employees. The State is not without appropriate resources to increase the compensation of faculty members.  It is a willful decision by the Governor to deny wage and benefits increases.

The Governor’s representative indicated they had not fully determined how to balance funds and faculty members needed to be patient. UHPA informed the Governors’ representative that they are doing damage to the reputation of the University as a desirable place to work.

The next negotiations session is December 1.

How the Governor’s EUTF offer may affect you

The True Impact of the Governor’s Offer

State law does not allow UHPA or any bargaining unit to negotiate health plan benefits or health plan offerings.  The plan benefits and offerings are determined by the Hawaii Employer-Union Health Benefits Trust Fund (EUTF), which includes 5 representatives from the employer, and 5 representatives from labor, one of which represents the retirees.  UHPA and all bargaining units can only negotiate the amount of health care premiums paid by the employer.   

The Governor’s opening offer of a 0% salary increase for the first year, a 0% increase for the second year, and an EUTF flat rate that will not increase with increasing healthcare costs has dire implications for our faculty members.  The Governor’s representative was unable to answer any questions regarding the impact of the proposal.

The employer currently pays 60% of the health care premiums costs for the plan offerings under the EUTF, you pay 40% of the health care premiums.  The Governor’s offer is changing  from a percentage to a fixed dollar amount at the level it is today, which means that any health care increase will pass directly on to you.   

The economy remains strong, but with Inflation/CPI projections of up to 3% in 2017, this offer will have a negative impact on your purchasing power.  Healthcare inflationary trends, although lower than in the past, are still slightly above 5%, with prescription drug costs running closer to 10%.  The projected CPI with rising healthcare costs, combined with no increase for your EUTF healthcare premiums, compound the impact of no pay increase.

To illustrate the impact of the Governor’s offer, we have provided some examples below which take into account an increased CPI of 3% and an increase of 5% in EUTF healthcare premiums.

Example #1

Chris is a R3 nine month faculty member at the minimum salary of $64,896, with family coverage under HMSA’s 80/20 Medical Plan, with vision, and dental coverage.

2016

  • Salary – $64,896
  • Annual Employee EUTF Premium Contribution – $7,892.16

2017

  • Salary – $64,896
  • Annual Employee EUTF Premium Contribution – $8,818.49 (increase of $926.33)
  • CPI Impact – $1,946.88

In one year, Chris’ salary will be decreasing by $2,873.21 or a decrease of 4.4%, erasing the 4% pay increase received in 2016.  

Example #2

Jamie is a rank 4 faculty member at the minimum salary, with two party coverage under HMSA’s 90/10 Medical Plan, with vision, and dental coverage.  

2016

  • Salary – $75,720
  • Annual EUTF Premium Contribution – $8,990.16

2017

  • Salary – $75,720
  • Annual EUTF Premium Contribution – $9,850.75 (increase of $946.99)
  • CPI Impact – $2,271.60

In one year, Jamie’s salary will be decreasing by $3,218.59, or 4.2%, erasing the 4% pay increase received in 2016.