Facts about restarting contributions to the UC Retirement Plan
After a holiday of nearly 20 years, UC and employee members of the UC Retirement Plan (UCRP) will begin contributing to the plan in mid-April in order to sustain and preserve faculty and staff pension benefits.
• UC needs to restore the long-term viability of the UCRP. Both UC and members of UCRP stopped making contributions nearly 20 years ago. Since then the plan’s funded status has steadily declined. Currently, UCRP is 95% funded on a smoothed basis, significantly less so on a market-value basis (based on the July, 2009 valuation).
• The Regents set mid-April, 2010 for the restart of employer and employee contributions.
• Employee contributions begin in mid-April and apply to May earnings. Depending on how often you get paid, you’ll see the UCRP contribution on your pay stub beginning anywhere from May 12 to June 1 (May 7 for Berkeley Lab employees paid biweekly).
• Employee contributions will be the amount that you have been putting into the Defined Contribution Plan (DC Plan) — about 2 percent of pay for most employees. This means that you will see no loss in take-home pay for the initial restart of contributions, since your contribution will simply be redirected from the DC Plan to the UCRP.
• The UC employer contribution will be 4 percent of pay and begins April 15.
• Both employer and employee contributions are expected to increase over time in order to sustain the pension fund. UC’s long-term approach to contributions will be similar to CalPERS’ approach. Most CalPERS members currently contribute from 5 to 7 percent of pay.
• Employee contributions are deposited in individual accounts for each employee and currently earn interest at a 6% annual rate. Employer contributions are placed in a general account on behalf of all members.
IF YOU LEAVE UC
• If you leave UC employment, you may leave your contributions on deposit with UCRP or take them as a rollover or direct payment. If you are a vested UCRP member — that is, if you have five or more years of service credit — you forfeit your pension if you take your contributions out of UCRP.
YOUR DC PLAN CONTRIBUTIONS
• Your mandatory contributions to the Defined Contribution Plan will stop when UCRP contributions begin. Your current balance in the DC Plan belongs to you and you can continue to manage those funds through Fidelity Retirement Services.
• If you are not a member of UCRP (a DC Plan Safe Harbor participant), you will continue to make mandatory contributions to the DC Plan.
• You may continue to make voluntary contributions to the DC Plan After-Tax Account, or pre-tax contributions to the 403(b) Plan or the 457(b) Plan. Contact Fidelity Retirement Services for more information (1-866-682-7787 or netbenefits.com).
• The restart of UCRP contributions is subject to collective bargaining for those employees who are represented by a union.
For more information about the restart of UCRP contributions, visit the Future of UC Retirement Benefits website.