UCSF

HR/Benefits 1
 Presented by Pamela Hayes
September 8, 2016

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HR/BENEFITS 2
 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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HR/Benefits
 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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HR/Benefits
 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 - Im 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. UCRP service credit

2. Age factor
3. 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 50.00%

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 .025
65

20 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/ 19
 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 Click for
vest. Click on View customized
More Ages to see estimates
more ages.

You can also click

on View More
Monthly Income
Options to
customize your
estimates.
Current HAPC
Current Years
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Can specify
retirement age or
specific retirement
& separation dates

Can specify
Can specify a anticipated
contingent annuitant salary at time of
retirement

Can enter
expected sick
leave hours at
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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 Members 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:

1) Spouse or Domestic Partner - where marriage or domestic
partnership was established at least one year prior to the
Members retirement and continuous until the Members 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)
o Does not apply if electing a Lump Sum Cashout
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 1976 and 2013/2016 Tiers
Payable upon Members death
Lifetime monthly income
Separate from the Post Retirement Survivor Continuance
4 Possible Alternative Payment Options
Contingent Annuitant can be anyone
Members 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

30
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 Retiree health benefits separate from UCRP
Not a vested benefit

Retiree health benefits not guaranteed

UCs 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/retirement-
benefits/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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