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Presented by Pamela Hayes
September 8, 2016
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HR/BENEFITS
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YOUR
RETIREMENT
UCRP
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
What income will you need at retirement??
◦ According to most financial planners – the target
replacement income should be approximately…
80%
Current Income
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
UCRP can provide that income replacement
◦ If vested, UCRP can provide anywhere from 5.5% to
100% of your income…
5.50%
100%
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
Defined benefit plan
◦ Traditional pension plan
◦ Benefit paid is based on a formula
◦ Monthly benefit is paid for life
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
1976 Tier
◦ Members hired prior to July 1, 2013 and without a break in service*

2013 Tier
◦ Members hired or rehired on July 1, 2013 or later following a break in service

2016 Retirement Choice – Pension Option
◦ Newly hired employees – on or after July 1, 2016**
◦ Essentially same as 2013 tier but with UCRP salary cap
* For UCRP membership purposes, a break in service is deemed to have occurred when a member
in the 1976 tier is rehired on or after the first day of the second month following the month the
member left UC employment
** Subject to collective bargaining agreements for impacted employees. Impacted employees
choosing pension option will be in 2013 Tier.
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
Contributions required
 Employees Pay*
◦ 8% - 1976 Tier
◦ 7% - 2013 Tier
◦ 7% - 2016 Retirement Choice
 UC Pays
◦ 14% - UC contribution
 All employee contributions currently earn 6% interest
*Subject to collective bargaining
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
Vesting Requirement
◦ 5 years of UCRP service credit

‘Vested’ after accruing 5 full years of UCRP
service credit
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Great - I’m vested!
But what does that mean??
It means you are now eligible for a benefit from
the Plan once you meet the age requirement
applicable to your respective pension tier.
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
Basic Retirement Income calculation – applies to all tiers
◦ Only three components - based on the date you retire
1.
2.
3.

UCRP service credit
Age factor
Salary Average - Highest Average Plan Compensation
Your UCRP benefit is independent of the amount of UCRP
contributions made
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
UCRP service credit
◦ UCRP service credit accrues in direct proportion to
time worked/paid, up to 100%
 For example, a 50% appointment will require 10
years of employment to accrue 5 years of UCRP
service credit
 Unused sick leave converts to additional UCRP
service credit: sick leave hours/2,000 *
◦ UCRP service credit is not the same as
employment service listed in the HBS timekeeping
system
* retirement date must be within 120 days of separation
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
Age factors
◦ Factor assigned to your age at the time of your retirement date
◦ For 1976 tier, factors begin at age 50 and increases monthly up to
age 60
 Age 50 and 0 months:
.0110
 Age 50 and 1 month:
.0111
 Age 60 and older:
.0250 maximum
◦ For 2013 tier & 2016 Retirement Choice, factors begin at age 55
and increases monthly up to age 65
 Age 55 and 0 months:
.0110
 Age 55 and 1 month:
.0111
 Age 65 and older:
.0250 maximum
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

Salary Average Highest Average Plan Compensation (HAPC)
◦ Average of your highest 36 consecutive months of UC base salary
◦ For members of Health Science Comp Plan, covered compensation is
limited to the ‘x’ component
◦ For members coordinated with Social Security AND under the 1976 tier,
there is a $133.00 offset applied to the HAPC
◦ Social Security offset does not apply to 2013 tier or 2016 Retirement Choice
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
UCRP benefit formula
◦ Age factor x UCRP service credit = Your Benefit %
◦ Benefit % x HAPC** = $ Basic Retirement Income $
** HAPC is reduced by $133 offset for 1976 Tier members coordinated
with Social Security; if you are under age 65 at retirement UC will
credit the offset back to you each month until you reach age 65
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0.0250
60
20
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50.00%
16
.025
65
20
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50.00%
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Select “AYS
Online”
Slect
“Retirement
Estimator”
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Log in
New
User?
https://atyourserviceonline.ucop.edu/ayso/
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Select
“Retirement
Estimator”
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On this page, you
will find estimates
starting at age 50,
your next birthday if
over age 50 or the
age expected to
vest. Click on ‘View
More Ages’ to see
more ages.
• Click for
customized
estimates
You can also click
on “View More
Monthly Income
Options’ to
customize your
estimates.
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• Current HAPC
• Current Years
of Service Credit
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•Can specify
retirement age or
specific retirement
& separation dates
•Can specify a
contingent annuitant
•Can enter
expected sick
leave hours at
time of retirement
•Can specify
anticipated
salary at time of
retirement
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
Example – 1976 tier
◦ Plans to retire age 60, age factor is .0250
◦ 20 total years of UCRP service credit
◦ HAPC is $8,133.00
◦ Formula
= (age factor x years of service credit) x HAPC*
= (.0250 x 20) x ($8,133 – 133)
= 50% x 8,000
= $4,000 a month Basic Retirement Income
* Reduced by SS offset of $133 for 1976 tier members coordinated with Social Security
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
1976 Tier Only
◦ Payable upon Member’s death
◦ Guaranteed benefit for ‘Eligible Survivor’
 25% of BRI for members coordinated w/ Social Security
 50% of BRI for members not coordinated w/ Social Security
◦ “Eligible Survivor” is defined by the Plan as:
o
 1) Spouse or Domestic Partner - where marriage or domestic
partnership was established at least one year prior to the
Member’s retirement and continuous until the Member’s death; or
if none  2) Natural or adopted children (50% support, unmarried, under
age 18 or under age 22, if a full-time student; or disabled based
on age, as above); or if none  3) Dependent parent (50% support)
Does not apply if electing a Lump Sum Cashout
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
1976 and 2013/2016 Tiers
◦ Payable upon Member’s death
◦ Lifetime monthly income
 Separate from the Post Retirement Survivor Continuance
◦ 4 Possible Alternative Payment Options
 Contingent Annuitant can be anyone
 Member’s benefit is reduced to account for contingent annuitant
 Reduction based on the age of the member, the age of the contingent
annuitant and the option chosen
◦ Irrevocable election at the time of retirement– cannot be changed
◦ Does not apply if electing a Lump Sum Cashout
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Example of
Contingent
Annuitant Options
Only for 1976
Tier
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
Lump Sum Cashout
◦ Lump Sum Cashout is in lieu of monthly benefit
 Available only with the 1976 Tier
 Present-day value of projected lifetime basic
retirement income, including COLAs
 Waives retiree health insurance and all other UCRP
benefits (except CAP)
 No sick leave conversion included in LSC calculation
 No temporary Social Security supplement if under age 65
 May be subject to taxes and early distribution penalties
unless rolled over to another qualified plan
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
UCRP After-Tax and UCRP Pre-Tax
◦ Balances can be viewed on At Your Service
◦ Balances represent your contributions to UCRP plus interest
earned - to help fund your UCRP benefit
◦ Balances will be swept in to general UCRP pool at time of
retirement

CAP Balance (for applicable 1976 Tier Members)
◦ Capital Accumulation Provision
 Allocations in 1992, 1993, 1994, 2002 and 2003
 Earns between 7.5 – 8.5% interest
◦ Disbursed at time of retirement
 Subject to taxes and possibly early distribution penalties unless
rolled over to another qualified plan (i.e. 403(b), 457(b), DCP)
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To view your
CAP Balance,
Select “UCRP
and CAP
Balances”
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
Retiree health benefits separate from UCRP
◦ Not a vested benefit

Retiree health benefits not guaranteed
◦ UC’s contribution subject to change each year
◦ Although unlikely, may be discontinued at any time

To check your eligibility for retiree health
benefits, please go to:
 http://ucnet.universityofcalifornia.edu/compensation-and-benefits/retirementbenefits/health-welfare/index.html
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
If eligible for retiree health, may be eligible to
continue following coverage:
◦ Medical, dental, vision, legal & AD&D
 Any medical, dental or legal premium will be deducted from
retirement check
 Retiree pays vision premiums directly to VSP
 Retiree pays AD&D premiums directly to AIG
◦ No lapse in coverage
 Must be eligible for coverage at time of retirement
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◦ All other coverage ends
 UC Basic and Supplemental Life insurance are group term policies
 31 day window after coverage ends to convert or port
 Converting is expensive as no medical exam is required
 Explore purchasing life insurance outside of UC if coverage is
needed in retirement
 Short term and supplemental disability coverage ends last day of
work
 FSA eligibility ends – expenses incurred after the eligibility end
date will not be eligible for reimbursement
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
Only five possible deductions from UCRP
retirement check
◦ Federal income tax withholding, if applicable
◦ State income tax withholding, if applicable
Medical premium, if any
Dental premium, if any
Legal premium, if any
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
Best time to retire?
◦ Personal decision – everyone has a different time line

Things to consider
◦ Retiree health graduated eligibility considerations?
 Graduated eligibility based on whole years
 Sick leave converted service credit included for graduated eligibility
◦ Age?
 Age factors increase between ages 50 & 60 for 1976 Tier
 Age factors increase between ages 55 & 65 for 2013 Tier & 2016
Retirement Choice
◦ Cost of living adjustments (COLA)
 Two different COLAs
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
If you are a 1976 Tier member and retire on July 1st with
at least one business day of separation….
o You will be immediately eligible for the one-time ‘Inactive COLA’
on your HAPC which increases your retirement income
o 2016 Inactive COLA was 2.00%
o For 2017, requires that you separate June 29th or earlier

A July 1st retirement will position you to receive your
first ‘Retiree COLA’, exactly 12 months later on July 1st
o Must be retired for 12 months, conferred on July 1st
o Matches up to first 2% of Consumer Price Index, then 75% of
difference over 4% - up to maximum 6%
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
Decisions to be made at the time of retirement
1. Elect your retirement benefits option
 Basic Retirement Income; OR Option A, B, C, or D; OR if
eligible, Lump Sum Cashout*
If electing one of the ‘Option’ payments, name your
Contingent Annuitant (this is an irrevocable election)
2. Select your Fed and CA State Tax Withholdings, if
selecting monthly income
3. If Eligible for a CAP, elect your distribution method
* Determine how to take receipt if electing the Lump Sum Cashout
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
Retirement timeline
1. Contact your campus retirement counselor
 Approximately 3 months in advance of retirement date
to avoid delays
 Campus Employees: 415-476-1400
 Medical Center Employees: 800-888-8267
2. Personal Retirement Profile generated
 Profile to include retirement data
 Review and make retirement elections/decisions
3. UCRP Election packet generated
 Election form must be signed and sent to Retirement
Administration Service Center (RASC) for processing
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
Retirement timeline
4. Confirmation Letter
 Mailed by RASC to your home address approximately 45
days from receipt of election form
 Review for accuracy
 Must change or cancel election by the later of retirement
date or 15 days from date of Confirmation Letter if later;
election irrevocable once deadline passes
5. Notify your department of intent to retire
 Department must notify HR of your separation and intended
retirement
 Your unused vacation hours will be paid out with final check
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
Retirement timeline
5. UCRP benefit paid monthly
• At the end of the month (i.e. – September 1 for August)
6. CAP, if eligible
• Distributed 4 weeks after initial UCRP benefit
 Rollover to UC Fidelity plan transferred electronically
 All other distributions are mailed to the employee at
home address on record
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