UCRP Defined Benefit. Formula: Age Factor x UCRP Service Credit x HAPC

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1 Understanding Your UC Retirement System (UCRS) Plans January 2010 University of California Retirement System University of California Retirement Plan () Retiree Healthcare Capital Accumulation Provision (CAP) Retirement SaVings Plans Defined Contribution Plan (DCP) 403(b) 457(b) University of California Retirement Plan ( your pension plan) Defined Benefit Plan 5 full years of Career employment - Vests Service Credit UCLA Service Credit No service credit for student time, Visiting Title time or Casual time, Service Credit Allocation Program was in 1999 (closed 2001) Earliest age to activate your 50 Stand alone benefit; separate from SSI, DCP, 403b, etc. Taxable Defined Benefit How Is My Monthly Pension Calculated? assigns an Age Factor to your age at your retirement. Your Age Factor is multiplied by your service credit which totals a percentage. This percentage is then multiplied by your HAPC*, Highest Average Plan Compensation your highest 36 consecutive average monthly earnings. This period can be anytime in your career not just the last 3 years and is the fulltime equivalent for part-time employees. *HAPC will be reduced by $133 for our UC members coordinated w/ss Pension Calculation Formula: Age Factor x Service Credit x HAPC Example: UCLA employee retires at age 62 with 20 years of service credit and HAPC of $2,733. Age Factor.0250 x 20 Years = 50% 50% x HAPC ($2,733 - $133 = $2,600) = $1,300 50% x $133 = Social Security Offset = $66.50 Monthly pension benefit is $1, (BRI) Social Security Offset is $66.50 (payable to age 65) 1

2 Age Factors Service Credit Note Accrue service credit at the rate you are paid. Approved LWOP result in NO service credit including non-coordinated W/C leaves. You can Buyback missed service credit due to a LWOP. Buyback must be elected within 3 years of return to eligible appointment. Any unused Sick Hours convert* into Service Credit! *Retirement must commence within 120 days of separation and a monthly benefit must be elected. What Is Included In My HAPC? Highest 36 Consecutive Month Average Salary? Pay Included in Average: - Base Salary - Merit Increases - Shift Differential - Stipend Pay NOT Included in Average: - Overtime - Incentive Award - Bonus Payment Options Basic Retirement Income By taking this payment you are taking the maximum payment to yourself Includes applicable Survivor Benefits Contingent Annuitant Payment Options A, B, C & D These options let you share the with one other person. You take a slight reduction to your pension benefit and the other person gets paid after your death Lumpsum Cashout Take the money and run! UC Defines Your Eligible UC Survivor As Survivor Beneficiary Spouse or Domestic Partner - married/uben 250 at least one year prior to retirement Child - under age 18; up to age 22 if still in school - disabled Dependent Parent - received at least 50% support from you one year prior to your death 2

3 What about a regular retirement? POST-RETIREMENT SURVIVOR Not optional Benefit is automatically built into the plan Member does not take a reduction in benefit With Social Security Without Social Security 25% B.R.I. 50% B.R.I. Eligible UC Survivors: Spouse or D/P (does not need to be age 60 or older), Child(ren), Dependent Parents What about a regular retirement? CONTINGENT ANNUITANT PAYMENT OPTIONS Option A: Full Continuance Option B: 2/3 Continuance Option C: 1/2 Continuance Option D: 1/2 Continuance (for married social security coordinated members only) What if I die but am eligible to retire? Does my spouse get anything? Employee is already eligible to retire (at least age 50 with at least 5 years of Career service credit) Death occurs before retiring Spouse/Domestic Partner* is eligible for monthly lifetime benefit immediately after your death Benefit is calculated as if employee retired the day after date of death and elected Contingent Annuitant payment option A Additional Survivor benefits may be payable only after spouse/domestic Partner dies (see Eligible UC Survivor ) *Spouse/Domestic Partner does not need to be age 60 or older Pension Calculation Examples Example: UCLA employee retires at age 62 with 20 years of service credit and HAPC of $2,733. Age Factor.0250 x 20 Years = 50% 50% x HAPC ($2,733 - $133 = $2,600) = $1,300 50% x $133 = Social Security Offset = $66.50 Monthly pension benefit is $1, (BRI) Social Security Offset is $66.50 (payable to age 65) (same example from slide 8) Payment Examples Member s Lifetime Mo $ Eligible Survivor Mo $ Contingent Annuitant Mo $ BRI $1,300 $ Option A (100%) $1, $325 $835 Option B (66%) $1,202 $325 $585 Option C (50%) $1,224 $325 $449 Option D (50%) $1, $624 In example, Contingent Annuitant = Eligible Survivor (spouse or domestic partner); Contingent Annuitant benefits are based on life expectancy. Cost of Living Adjustments (COLAs) When an inactive member retires, the HAPC is increased to include a COLA of up to 2% for each July 1 between the separation date and the retirement date. After receiving benefits for one year, members are eligible to receive an annual COLA paid each July 1. The COLA is based on the Consumer Price Index the previous year, and will not exceed 6%. CPI COLA 2% 100% 2% - 4% -0- > 4% 75% 3

4 UC Retiree Healthcare Includes Medical, Dental & Legal Plan Eligibility for Retiree Healthcare member before 1/1/90 and who retire within 120 days of separation, will receive 100% of UC s maximum contribution towards medical and dental premium if: - retire before age 55 with at least 10 full years of service - retire after age 55 with at least 5 full years of service Eligibility for Retiree Healthcare member on or after 1/1/90, or were rehired after 1/1/90 following break-inservice of more than 120 days, will receive a percentage of UC s maximum contribution towards premium based on: - 50% with 10 full service years - 5% additional per year beyond 10 years - 100% at 20 full service years Graduated Eligibility Sample Premium Max. UC Retiree U UC UA 1, UAC 1, M MM MC MA MAC 1, Years Graduated Eligibility, Anthem Blue Cross Monthly Rates Retiree Healthcare Whatever Medical, Dental or Legal Plan you are enrolled in at the time of your retirement is what you go out with Enrolled dependents transition out with you Retirees have an Open Enrollment window every November to make changes for the following January 1 Eligible PIEs Retiree Healthcare What If I Leave California? If you have a permanent change of address outside of California you may continue UC Retiree Healthcare through Blue Cross PPO (Preferred Provider Organization) If you are living outside California but keep a Los Angeles address in UC s database, then your medical plan will cover you for Emergencies only 4

5 Lump Sum Cashout (LSC) You can take your as a one time Lump Sum Cashout, but you would loose the following: Monthly Post Retirement Survivor Benefits Contingent Annuitant Benefits Medical, Dental & Legal Plan Benefits Sick Leave Hour Conversion Annual Cost-of-Living Adjustment One Time Death Payment Lump Sum Cashout Options Rollover (tax deferred) 403(b), 457(b) and/or DCP IRA or another employer s qualified retirement plan Cashout (taxable) 20% mandatory Federal withholding 2% California State withholding (optional) if under age 55 at separation, rule of 59½ penalties are assessed at tax time; 10% Federal and 2½% California penalties* Split distribution: Some paid to you (taxable & possible penalties*) Some rolled over (tax & penalties deferred) Capital Accumulation Plan (CAP) CAP I 5 Rollouts from April 1, 1992 to July 1, % Vested Earns fixed 8½% annual interest CAP II 2 Rollouts from April 1, 2002 to April 1, % Vested Earns trust earnings, expected around 7½% annual interest Must be distributed when is activated. Can be rolled over into the 403(b) or 457(b) plan. See Distribution Option screens. Retirement SaVings Plans Defined Contribution Plan (DCP) 403(b) 457(b) Defined Contribution Plan Pre-Tax Account (DCP) Mandatory pre-tax retirement savings plan employee contributes on a monthly basis: With Social Security 2% less $19 (to OASDI wage base) Without Social Security 3% less $19 Safe Harbor 7½% Starting April 2010, contributions (excluding Safe Harbor) will be redirected to. Defined Contribution Plan After-Tax Account Voluntary after-tax retirement savings plan. Investment option is determined by participant. Earnings and interest grow tax deferred. 5

6 403(b) Retirement Savings Plan Voluntary pre-tax retirement savings plan. Investment option is determined by participant. Contributions, earnings and interest are tax deferred. 457(b) Retirement Savings Plan Voluntary pre-tax retirement savings plan. Investment option is determined by participant. Contributions, earnings and interest are tax deferred. Distribution Options at Termination All paid to you less mandatory 20% Federal withholding; if under age 55 at separation, rule of 59½ penalties are assessed at tax time; 10% Federal and 2½% California penalties * CAP can be rolled over into your DCP, 403(b) or 457(b) Plan. This rollover would not be taxed nor penalized Roll over all into an IRA or new employer plan. This rollover would not be taxed nor penalized Split distribution: some paid to you (taxable & possible penalties*) & the rest rolled over (tax & penalties deferred) *NOTE: 1099-R will be mailed to you at tax time; this replaces the W2 and applies to retirement plan distributions Many Transactions Can Be Done Online! At Your Service website Click on Sign Into My Accounts Retirement and Savings Plans link, then Retirement Plan Benefit Estimator Log in with your User ID & UC Password Check your Service Credit Check your CAP account balances Generate Estimates More Transactions Can Be Done Online! Fidelity Retirement Services website click on Access My Account Log in with your Social Security Number or User ID & PIN enrollment for 403(b), 457(b) and/or DCP A/T change future investment direction of DCP, 403(b), 457(b) and/or DCP A/T contributions transfer balances among investment options in DCP, 403(b), 457(b) and/or DCP A/T plans Change/suspend 403(b), 457(b) and/or DCP A/T payroll contributions Need More Information? Call Benefits Services at Visit click on Benefits Health Systems Human Resources, Medical center employees (non-school of Medicine) and NPI Staff One hour appointments t are usually available with your designated Benefits Counselor for retirement eligible employees who are within 3 years of retirement. A G; Camille Carr, ccarr@chr.ucla.edu H O; Tom Coda, tcoda@chr.ucla.edu P Z; Robert Larriva, rlarriva@chr.ucla.edu Please do not walk into CHR without an appointment; we generally cannot accommodate walk-ins. 6

7 At Your Service website At Your Service website At Your Service website Thank You for coming! g{x XÇw 7