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2015 April 29

UC messes with 403B plans

Filed under: Uncategorized — gasstationwithoutpumps @ 21:21
Tags: , , ,

This week I got a letter from the University of California Retirement Savings Program saying

If you take no action: After 1 p.m., Pacific Time, on Thursday, July 2, 2015, your existing balances in any affected funds, and any future contributions currently set to be directed to any of the affected funds, will be directed to the UC Pathway Fund 2015.

What they are saying is that unless I stop them, they will take all the money that I carefully allocated in my 403B fund and dump into an untested new fund that they are creating.  The alternatives provided are to transfer the money to other UC funds, or to start paying Fidelity for a BrokerageLink account.

Why?  Well, they claim

UC is streamlining the fund menu to help RSP participants make better investment choices by reducing overlap between options and simplifying the fund-selection process. For those participants who desire more choice, the BrokerageLink® option will still be available.

Also the smaller menu allows for more efficient monitoring so that we can continue to offer high-quality funds in a range of asset classes, with expenses that are generally lower than many similar publicly traded investment options.

Quite frankly, I don’t believe them.  Not that many people are currently using the wide range of options that are available, and those of us who are chose to do so despite hassles in setting up the accounts this way.  Only those who already believed that they could make better choices than the UC managers are affected by the changes.  So it isn’t to help us make better choices—it is to take choices away from us.  So why?

  • One possibility is that the current deal they have with Fidelity to manage funds and provide access to many non-Fidelity funds was not being lucrative enough for Fidelity, and Fidelity wanted to start charging brokerage fees. That is plausible (though not very), but if this were just a matter of charging fees, then the University would have informed people with the accounts that were affected that Fidelity was about to start charging fees, but people could avoid those fees by transferring the money to UC-managed funds, rather than sweeping up the money if they weren’t stopped.  In fact, BrokerageLink® isn’t going to charge fees for Fidelity funds (beyond the management fees built into the funds), so this isn’t a bid by Fidelity to get more fees (though it is possible for them to collect rather large fees if people choose funds unwisely and it may cost me more to keep the Calvert accounts if I do it through BrokerageLink®).
  • Another possibility is that the University wanted to terminate the Fidelity deal and keep as much money in UC funds as possible.  But Fidelity is still in the loop so they aren’t terminating a Fidelity deal (though perhaps the terms have changed—neither UCOP nor Fidelity talks about the details of the arrangements they make with each other).
  • What seems most likely is that UC has recently hired a new manager for the retirement program, and randomly changing policies with no thought to the consequences is what new managers do. Sort of like dogs pissing on fire hydrants—it isn’t for the benefit of the hydrant.

Because of the botched way that they implemented this reduction in investment options (from hundreds of plans to 15 UC-managed plans) with this stop-us-if-you-can fund snatch, I’ve lost all faith in the UC Office of the Chief Investment Officer of the Regents (the official title they claim in the letter).  I no longer believe that they are investing retirement funds on my behalf, but are only interested in playing games with my money.

I suppose I should call up Fidelity Retirement Services and find out how much it would cost me (in time and in fees) to “do nothing”—that is, to set up a BrokerageLink® account with my funds in exactly the same allocation as currently and with future 403(b) contributions allocated exactly as now.  That is what UC should have done as their default option, not sweeping all funds not on their short list into one of the UC Pathway funds.

Luckily, I’m over 59.5 years old, so I can roll all my 403(b) money into traditional IRAs, and that is currently what I plan to do—not only with the plans that they are trying to shut me out of, but all the 403(b) money, including that in UC-managed funds. But I don’t know what I can do about the “defined contribution” plan (401(a))—I believe that can also be rolled over into a traditional IRA.

Switching to an IRA means that I’ll have to find some mutual funds that I trust to move the money to.  I’ll be looking for socially responsible investment funds (two of the funds they are shutting out are Calvert funds that I’d chosen years ago for socially responsible investing), for a more general stock fund (I have some money in Fidelity Magellan), and for corporate bonds (taking my money out UC bonds, because of my lack of trust in UC’s new fund manager). For socially responsible investing, I’ll probably start by looking at http://charts.ussif.org/mfpc/?, which provides statistics from Bloomberg on various socially responsible funds—then digging a bit into what the funds claim their principles are.

I don’t really have time to deal with all this hassle this quarter—I’m sure they counted on most faculty and staff not having time to think about the investment and just follow the manager’s default choice.  I wish they had made the “change nothing” choice the default, even if it meant that some of us would have been charged some fees.

2015 January 23

Dress like it’s 1965 Winner

In Dress Like It’s 1965, I showed the clothes that I wore for UCSC’s “Dress Like It’s 1965″ Day on Thursday, 15 Jan 2015, to help celebrate the 50th birthday of UCSC (including the marvelous shoes my wife painted). Today I found out that I won 1st place in the men’s category! Pictures of the other winners can be found at http://50years.ucsc.edu/kick-off/.

Here is the picture they took of me, which was used for the judging:

Copied from http://50years.ucsc.edu/css/assets/images/kick-off/winners/1-guy.jpg Sorry, I can't find the photographer's name on the 50th anniversary website to give proper photo credit.

Copied from http://50years.ucsc.edu/css/assets/images/kick-off/winners/1-guy.jpg
Sorry, I can’t find the photographer’s name on the 50th anniversary website to give proper photo credit.

I feel like I cheated a bit, as I was reproducing what I wore in 1969–1971, not 1965. Also I’m wearing a modern digital watch, since I no longer own any analog ones and forgot to take the watch off. But the judges obviously weren’t too fussy.

2015 January 16

Dress like it’s 1965

UCSC had a “Dress Like It’s 1965″ Day on Thursday, 15 Jan 2015, to help celebrate the 50th birthday of UCSC.  I participated in the festivities by dressing as I did in high school, with bright red pants, orange shirt, white belt, and Campbell soup tie.  The tie, tie bar, and glasses were the ones I wore in high school, but the rest of the clothes I had to reconstruct, as I weigh about 60lbs more now than I did in high school. My head is also wider, which means my old glasses don’t fit very well.  (They’re less than 1 diopter off in the prescription, though—good enough to get around in, but headache-inducing.)

The red pants should have been denim, but I couldn’t find any red denim pants—the red polyester from MoonZooom was the best I could do. The pants were the only purchase—everything else I wore we already had in the house. I was also cheating a bit, as the clothes I wore reflected 1969 or 1970, rather than 1965.  I was in 6th and 7th grade in 1965, and I did not wear anything interesting then.

Here are some photos of what I wore:

The woman is the manager of the engineering advising office—she normally has short hair and dresses very professionally—but she looks good in the 1965 styles also!

The woman is the manager of the engineering advising office—she normally has short hair and dresses very professionally—but she looks good in the 1965 styles also!

The most distinctive part of my outfit was the shoes, which my wife painted (the color is mostly Sharpie, though as she didn't have time for paint to dry).

The most distinctive part of my outfit was the shoes, which my wife painted (the color is mostly Sharpie, though, as she didn’t have time for paint to dry).

shoes_heels shoes_instep

These shoes are not like anything I wore in the 60s, but I would have, if they'd been available!

These shoes are not like anything I wore in the 60s, but I would have, if they’d been available!

The festivities were interrupted by a student protest:

One of the protestors with a cardboard sign saying "COPS OFF CAMPUS   CAMERAS OFF CAMPUS" A larger banner calling for firing the President of UC can be seen on the stage in back.

One of the protestors with a cardboard sign saying “COPS OFF CAMPUS CAMERAS OFF CAMPUS”
A larger banner calling for firing the President of UC can be seen on the stage in back.

The front of the protestors' parade, with a cowbell.

The front of the protestors’ parade, with a cowbell.

I was quoted in the Santa Cruz Sentinel:

Kevin Karplus, biomolecular engineering professor, wore his old high school 1960s tie and taped glasses. He said he was glad the event was interrupted by a student demonstration.“It wouldn’t be the 60s without one,” said Karplus, who said in his 28 years at UCSC, he’s watched enrollment and fees grow and student resources and state funding drop.

I actually said a good deal more than that to the reporter—I’m actually in agreement with the students that raising tuition is the wrong solution to the continued reduction in state funding for the University of California, and that the game of chicken that Janet Napolitano has decided to play with Jerry Brown is not in UC’s best interests. But I don’t expect anything to change as long as we have such a dysfunctional legislature—I don’t expect to see UC’s financial situation to improve before I retire in a few years. I also gave more specific instances: that the enrollment has grown threefold while the number of librarians has been cut in half.  (I now think that the actual numbers may be slightly more extreme than that.)

I doubt that firing Napolitano would do any good, though, as she is pretty much following exactly the same script as her predecessor. It would take an wholesale turnover of just about all the senior executives in the UC Office of the President (or firing and not replacing them) to get any significant change in policy there. It might also take replacing most of the Board of Regents, who seem hell-bent on privatizing the University—I don’t know if that originates with them, or whether they are just rubber-stamps for UCOP, but I suspect that the Regents and UCOP are in close agreement.

2015 January 7

Bait and switch health insurance

Filed under: Uncategorized — gasstationwithoutpumps @ 21:49
Tags: , , , , ,

I just started a new health insurance plan at UCSC this month, one that costs me $549.67 a month in premiums, that I selected specifically because it would let me continue with the family doctor we’ve had for years. Note that this plan is essentially the same as the one that was free 10 years ago—they keep raising the prices to the faculty without improving the product.

Today, I was very surprised and distressed to get the following message:

January 7, 2015

To:  UCSC Academic and Staff Employees
From:  Lori Castro, Interim Assistant Vice Chancellor, Staff Human Resources; Pamela Peterson, Assistant Vice Chancellor, Academic Personnel
Re:  Blue Shield of California and Sutter Health Provider Negotiations – Contract Termination and Transition Period

As you may have heard, Blue Shield of California and Sutter Health were unable to agree on a contract for 2015, which affects many UCSC employees using the Palo Alto Medical Foundation.  On January 5th, 2015, Blue Sheild of California sent letters to more than 140,000 members state-wide who are users of Sutter Health in Northern California, informing them that the Blue Shield/Sutter Health contract was terminated, effective Dec. 31, 2014.  However, there will be a six-month transition period for UC Blue Shield plan members.

University of California employees (and retirees) are affected by this development if they use Sutter providers, including Palo Alto Medical Foundation (PAMF), and if they are enrolled in the following UC health plans:

  • Blue Shield Health Savings PPO
  • Core Medical PPO
  • UC Care PPO

Blue Shield has directly contacted members in the aforementioned plans, but we would like the campus community to be aware of the situation.

From January 1, 2015 thru June 30, 2015 there will be a six-month transition period to allow UC Blue Shield plan members time to find an alternative provider.  During the transition period UC plan members will continue to receive services at the UC Select level at the Palo Alto Medical Foundation.  Blue Shield Health Saving Plan and Core Plan members will continue to have the preferred 80% coverage at the Palo Alto Medical Foundation but can anticipate a higher cost due to the fact the 80% coverage will now be on a non-contracted rate.

Contract negotiations are ongoing, and it is our hope that Sutter Health and Blue Shield will come to an agreement before the transition period ends. If the parties do not come to an agreement, we anticipate the University of California will announce a plan but for now there is no additional information. The UC is not authorizing a special opportunity for employees to change medical plans at this time.

Last year I used a different insurance plan (UC Core instead of UC Care—a confusingly similar pare of names) that cost me nothing, but that had high deductible and co-pays. Because I’m overdue for a colonoscopy, I decided to switch plans this year, though the premiums may still be higher than the expected medical expenses for the year.

Both the plan I was on last year and the plan I switched to this year are saying that I can’t keep my family doctor—when I selected those plans specifically because they would cover that doctor!  UC should be suing Blue Shield for bait-and-switch tactics and refunding the health insurance premiums collected under false pretenses from the faculty and staff.  But I don’t expect UCOP to do a damned thing about it—they’ve taken the attitude that as long as they have their Kaiser plan in Oakland, the rest of the University can pay through the nose for inadequate health insurance.  UCSB got screwed last year, so it is UCSC’s turn this year.

Perhaps the faculty union (the Santa Cruz Faculty Association) could protest the change? No—they have a memorandum of understanding that they will remain toothless about anything UC does to the faculty.  They might write a politely worded note expressing their dismay.

Of course, this game of chicken between Blue Shield and Sutter Health doesn’t affect just the UCSC employees. A Santa Cruz Sentinel article points out

In Santa Cruz County, an estimated 4,500 policyholders who signed up with Covered California last year and picked Blue Shield are affected along with many more who purchased an unsubsidized Blue Shield policy on the open market.

UPDATE January 30, 2015:

To: UCSC Academic and Staff EmployeesFrom: Lori Castro, Interim Assistant Vice Chancellor, Staff Human Resources; Pamela Peterson, Assistant Vice Chancellor, Academic Personnel

Re: Blue Shield of California and Sutter Health Provider Negotiations

The University is pleased to announce that as of late last night, Blue Shield and Sutter Health have settled on a two-year contract.

Blue Shield of California today, January 30, 2015, announced the signing of a new, two-year contract with Sutter Health. Blue Shield is pleased to offer members access to Sutter Health providers and facilities as participating providers through December 31, 2016. Blue Shield apologizes that the contract negotiation took longer than expected and that customers and members experienced uncertainty or disruption. We also regret the worry that this has caused the campus community.

Blue Shield will be notifying all of its members of the development.

Thanks for all of your patience on this matter.

 I’m very relieved.

2014 November 18

Question about high school workload for home schooling

On Thu, Oct 30, 2014 at 12:57 AM, a parent  wrote to a homeschooling e-mail list (I forget which one now):

I want to prepare my kids for college, but I also value them spending an hour drawing, or trying to get a fire by rubbing cottonwood sticks together, or making a ridiculous video for fun. Can’t we have it both ways? I’ve already written off UC for freshman year, but I don’t necessarily want community college to be the only option they have. I want his 16th year to be just as fun as his 6th, filled with math and writing, yes, but also with whatever his passions are. That seems like an exciting time to get real world experience, like interning at an environmental organization, helping with water quality research, becoming a park docent, going on amazing backpacking trips … as opposed to sitting studying biology with a textbook, for example. 

Am I in dreamland? Are my priorities right here? He is in 8th grade, so according to these presenters, 9th grade is around the corner and we should be figuring out this fast.

Thoughts???

I’m coming from a different place than many home schoolers, as we did public and private schools through 9th grade, only switching to home school for 10th, 11th, and 12th grades.  I understand that the reverse path (starting out in home school and switching to public or private for high school) is more common.

Having just sent my son off to college this fall (at UCSB in the College of Creative Studies) after three years of home schooling (with the aid of an umbrella school in the local school district), I can answer a few things with some confidence:

  • No matter what you do, entry into the super-selective schools is effectively a lottery.  Most people don’t win the lottery.  All the crazy-making prep changes the odds very little on the super-selective admissions lottery. Unless you donate millions to buy your way in to a private school, your odds are not much better than the ones you get from the Common Data Sets for each college.
  • High school can involve a lot of fun activity—my son took at least 22 different theater classes in his 4 years of high school, about 8 of them in his senior year (mostly through WEST).  There were at least 15 different performances in his last year (see his theater page) with four different shows four weekends running one month. He also started a tech start-up with other home-schooled teens (something that he is continuing in college—they’re expecting their 4th prototype back from China this week and hope to do first sales through Kickstarter in December).  He also was involved in a couple of the MATE underwater ROV competitions, did science fair (up to state level) every year except his senior year, kept up a full load of UC a–g courses, and still had time for his main recreations (reading and computer programming).
  • Some springs got a bit stressful, with the umbrella-school trip to Oregon Shakespeare Festival, State Science Fair, WEST performances, MATE robotics, and AP exams all piling up in the same few weeks.  Time management and priority setting required parental support (though my wife and I sometimes disagreed about how much parental support was needed).  Extra parental support was needed some years (like for flying from CA state science fair to Ashland, Oregon, when two events overlapped by a day, or finding a way to get AP exams offered in the make-up time slots, when AP exams conflicted with the Ashland trip, or even just finding a way to take AP exams for AP courses not offered in our county, like the AP Physics C exams).
  • Taking courses at Cabrillo College and at UCSC can be very good experience (my son had 2 at each: Spanish at Cabrillo and math at UCSC).  Cabrillo courses are much cheaper, but the hassle of biking 45 minutes each way for classes (or taking even longer on the bus) made scheduling them harder.  The practice of getting himself to classes on an irregular schedule was good prep for college, where he has a different schedule every day (from Wednesdays with classes from 8am to after 8pm to Fridays with one class at 1–1:50). Getting into lab classes at Cabrillo turned out to be very difficult, so we ended up doing all science at home (calculus-based physics for 2 years, then on-line AP chemistry for one year).

For students thinking of University of California (still a very good choice, even if the state legislators and state governor don’t put much money into UC any more), I’d recommend trying to make sure that the a–g courses are covered in spirit, even if the courses are at home or through other non-UC-approved sources.  It is not a perfect curriculum, but it represents a good compromise between many different views of what a high school education should include.​

The time-management skills my son learned from doing too many of the things he loved should help him get through college, where he is likely to set up the same sorts of stresses for himself—he took a fairly light load first quarter (4 courses: 2 math, 2 computer science), but is planning a heavier load for winter (6 courses: 2 math,  3 computer science, 1 theater, I think).  Luckily 2 or 3 of the courses are graded on a rather strange system, where the teachers decide at the end of the course how many units were earned, so if he slacks a bit on those courses his grades won’t suffer—he’ll just earn fewer units.

Of the generic advice from the Khan Academy about what all high school students should be doing:

  • Take college-prep courses. Yes, definitely.  The a–g courses are a good guide.
  • ​Focus on your grades. Not really—we kept him focused on learning, not on grades. Most of his courses were ungraded, though we had very high standards for what we expected him to do.  Those courses from outside providers that were graded got high grades, but that was a natural consequence of focusing on the learning and doing all the work to high standards, not from paying any particular attention to grades.
  • Explore and commit to extracurricular and leadership activities. We considered his theater work and his start-up company as curricular activities, but someone with a more conventional view of education would have considered them extracurricular. I don’t know whether his odds at super-selective schools would have been different if we had spun the work as extra-curricular rather than curricular.​
  • Find summer volunteer opportunities/jobs/internships. Nope, he spent his summers doing more theater, more on the start-up company, and relaxing. He worked very hard at the theater and on the start-up, but it wasn’t a “job” where he was reporting to a boss—it was more like professional work, where he had to manage his own time, sometimes with externally imposed deadlines.
  • Begin an ongoing dialogue with your parents about how to pay for college. Start saving for college. High school is rather late to be thinking about paying for college.  We saved 10% of my salary each year in a 529 plan from the day he was born. As it turns out, because he ended up at a state school, we saved more than we needed to, so unless some of it gets used for graduate school expenses, we are likely to end up paying a tax penalty in 4 years for the previously untaxed earnings in the 529 plan.
  • Search and apply for non-traditional scholarships (those available before you are a senior in high school). Other than the National Merit Scholarship (he was a Finalist, but no one offered him money except desperate schools that had nothing of academic value to offer), he did not apply for any scholarships. Most of the scholarship applications are a lot of work (comparable to another college application), with very little expected return. He decided to put his time into his startup company instead, which has given him very valuable learning and experience, even if it never breaks even. Because he ended up at a public university, and we had been saving enough to be able to pay for his going to a private school, he did not need a scholarship to go to college. So the investment of his time in learning how to design electronics widgets and get them manufactured was probably a wise one—it will pay off later much more than a $1000 scholarship would.
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