2013 UCRP Faculty Pre-Retirement Workshop ... - Academic Affairs

University of California
Retirement Overview
Facilitator: Pamela Hayes
UCSF Human Resources
Benefits Specialty Center
3333 California Street—Suite 330
Telephone: 415/476-1400
Fax: 415-476-2328
Email: benefits@ucsf.edu
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UC Retirement System
‣ UC Retirement Plan
(UCRP)
‣ With Social Security
‣ Without Social Security
(pre-1976)
‣ Safety (police)
‣ UC Retirement Savings
Programs
‣ 403(b)
‣ 457(b)
‣ Defined Contribution Plan
(DCP)
Fidelity Retirement
Services is the Record
Keeper for these programs
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University
of
California
Retirement Plan
(UCRP)
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University of California
Retirement Plan (UCRP)
‣ Defined Benefit Plan (Pension)
‣ Enrollment is Automatic for Faculty with
Full Benefits:
‣ Must be in an eligible appointment at 50% or more for a
year or more
‣ You are ‘Vested’ when you accrue 5 full
years of UCRP Service
Enrollment continues until there is a break in
service
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University of California Retirement
Plan (UCRP)
‣ UCRP Benefits at Retirement are Based on
a Formula:
1. Age factor - based on age at retirement
‣ 50 is the minimum retirement age; factor = .011
‣ 60 is the age the factor reaches maximum = .025
2. Years of UCRP service credit
‣ Accrues in direct proportion to percentage of time on
pay status
3. HAPC (Highest Average Plan Compensation) = Salary
Factor
‣ Average of 36 continuous months of highest ‘X+Xprime’
salary
‣ Reduced by a social security off-set of $133.00 for
faculty coordinated with social security
‣ Credited back until age 65 (Social Security Supplement)
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Health Sciences Compensation Plan
FULL
BENEFITS
Compensation
Covered under
UCRP and
UC-Sponsored
Health and
Welfare
Plans
HSCP
INSURANCE
Compensation
Covered under
HSCP Life/AD&D
& Long Term
Disability
School of Medicine
No Benefits
Z
$10,000
Y
$25,600
(Base)
X+Xprime
$94,400
$130,000
$120,000
$94,400
Assistant Professor Step 2 Scale 4
Academic Salary Scales effective October 1, 2011
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University of California
Retirement Plan (UCRP)
‣ Provides for lifetime monthly retirement
income or lump sum cashout:
‣ Monthly Benefit =
‣(Age factor) x (Years of UCRP service) x (HAPC)
‣ Lump Sum Cashout =
‣ Present-day value of projected lifetime basic retirement
income, including COLAs
Waives health insurance
Waives rights to all other UCRP benefits (except CAP)
Immediately taxable—unless rolled over
The benefit you receive is independent from
the amount ($$$s) you paid in
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University of California Retirement
Plan (UCRP)
‣ Employee Contributions:
‣ Currently 5.0%* (minus $19) on gross ‘X’
earnings
‣ July 1, 2013
‣ Will increase to 6.5%*
‣ Employer Contributions:
‣ Currently 10% on gross ‘X’ earnings
‣ July 1, 2013
‣ Will increase to 12%
*Subject to collective bargaining
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University of California Retirement
Plan (UCRP)
‣ Retirement Estimator Tools
– At Your Service Online (AYSO) Estimator
• https://atyourserviceonline.ucop.edu/ayso/
• Sign in to At Your Service Online
• Go to retirement estimates
– Estimates based on specific ages
– HAPC used is current value
– Retirement Plan Benefits Estimator
• http://atyourservice.ucop.edu/applications/ucrpcalc/e
stimator.html
• Enter your own values for Age, UCRP Service and
HAPC
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University of California
Retirement Plan (UCRP)
Members with Social Security
Basic Retirement Income
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UCRP Monthly Income
Cost of Living Adjustment (COLA)
‣ Matches first 2% of Consumer Price Index (CPI)
increase
‣ Plus 75% of CPI increase above 4%
‣ Maximum COLA 6%
‣Example: (assumes CPI increase of 5%)
COLA matches first 2% 2.00%
plus 75% of increase above 4% 0.75%
COLA = 2.75%
‣ First COLA: Effective the first July 1st following 12
months of retirement .
2012 Retiree and Inactive COLA = 2%
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What is ‘Special’ About
Retiring on July 1 st
‣ If you retire on July 1 st with at least one
business day of separation….
‣ You will be immediately eligible for the ‘Inactive
COLA’ on your HAPC which will increase your
basic retirement income – in 2012 it was 2%
(for 2013, requires that you separate June 27 th or earlier)
‣ You will also then be well positioned to
receive your first retiree COLA, 12 months
later on July 1 st
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University of California Retirement
Plan (UCRP)
‣Capital Accumulation Provision (CAP)
‣ CAP I allocations made to certain UCRP
Members in 1992, 1993 and 1994
Interest accrues at 8.5% (guaranteed)
‣ CAP II allocations made in 2002 and 2003
Interest at specified rate (currently 7.5%)
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University of California Retirement
Plan (UCRP)
Income Taxes
‣ All UCRP distributions are subject to
applicable federal and state taxes
‣ Monthly Retirement Income
‣ taxable when paid
‣ non-taxable amount based upon any:
‣Member contributions prior to July 1, 1983
‣after-tax payments made for service credit buybacks
prior to July 1, 1997
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UCRP
Death Benefits
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UCRP DeathBenefits
Who’s Who
• Survivors* are Pre-Defined by
UCRP as your:
– legal spouse or registered/declared
domestic partner
– eligible children

UCRP Death Benefits
Who’s Who
• A Contingent Annuitant is a person
you designate to receive UCRP
Benefits when you pass away:
– Contingent annuitant can be anyone
• Can be eligible survivor or not
– Reduces monthly benefit payable to you
– Options based on life expectancy of both
you and the contingent annuitant
– Irrevocable election at retirement
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UCRP Death Benefits
Who’s Who
• Beneficiaries are person(s) you designate:
– One Time UCRP Death Payment
– Capital Accumulation Provision (CAP)
– Life Insurance
– Retirement Savings Plans
• If not designated then benefits go to -
• Legal Spouse/DP, or if none,
• Child(ren) or, if none,
• grandchild(ren), or if none,
• Parent(s), or if none,
• Siblings, or if none,
• Member’s estate
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UCRP Survivor Income
Benefits
Post-Retirement
Death While Eligible To Retire
Pre-Retirement
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UCRP
Post-Retirement Survivor
Continuance
• Lifetime monthly income payable to
eligible survivor automatically upon
retired member’s death
– Amount paid to survivor:
• UCRP with Social Security
– 25% of Basic Retirement Income
• UCRP without Social Security
– 50% of Basic Retirement Income
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University of California
Retirement Plan (UCRP)
Members with Social Security
Basic Retirement Income
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UCRP
Pre-Retirement Survivor
Benefits-Death While Eligible -
‣What happens if I am eligible to retire
and I die before I elect to retire
YIKES!!
Benefit calculated as though you had
elected Alternate Payment Option “A” on
the date following death with spouse/DP
designated as “Contingent Annuitant”
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UCRP
Pre-Retirement Survivor
Benefits
• Monthly income payable to eligible survivor*
automatically upon death of active member with
2 yrs service credit
– Amount paid to survivor:
• UCRP with Social Security
– 25% of final salary
• UCRP without Social Security
– 25%-50% of final salary (based on # of eligible survivors)
*See Summary Plan Description for difference between Survivor and Surviving Spouse
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UCRP Death Benefits
Beneficiary
• One-time payment to beneficiary upon Member’s
death
– The greater of:
• $7,500, or
• $1,500 plus one month’s final salary
– Active Members only--UCRP entry before 10/1/90
– Capital Accumulation Provision (CAP)
• Other Benefits
– Life/AD&D Insurance proceeds
– UC Retirement Savings Plans (Fidelity)
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UCRP
Disability
Benefits
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UCRP--Other Benefits
Disability Income Benefits
• Must be vested
• Must meet UCRP disability criteria
• Benefits:
– Percent of final salary based on years of
UCRP service credit (15%-40%)
– May qualify for retiree health
– UCRP service credit may continue to
accrue
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UCRP
Health Benefits
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UCRP Health Benefits
‣Benefits always subject to change/not
guaranteed
‣Must be eligible for Health Insurance at
the time of retirement
‣Must retire within 120 days of
separation to maintain eligibility in
retirement
‣May be subject to graduated eligibility
‣Do not continue if Lump Sum is elected
*Specific eligibility rules may apply
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UCRP Monthly Income
Health Insurance
‣ Retiree Medical and Dental
Pre-Jan 1990
Post Jan 1990 - Graduated Eligibility
Post July 2013 - Graduated Eligibility
On July 1, 2013, if vested and age + service = 50+, then
Post Jan 1990 rules apply
If not eligible for benefits at retirement, COBRA
may apply
‣ Vision insurance may continue
Retiree pays premiums directly to VSP
If not eligible, COBRA may apply
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Post 1990 Graduated Eligibility Chart
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2013 Retiree Net Cost Based on UC Contribution = 100%
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2013 Retiree Net Cost Based on
UC Contribution < 100%
• For Example: Health Net Blue & Gold, Self +
Adult Coverage Tier
– 15 yrs of UCRP Service ~ 75%; 908.50 x .75 = $681.38
• $1225.29 - $681.38 = $543.92
• Retiree Pays $543.92 per month
– 10 yrs of UCRP Service ~ 50%; 908.50 x .50 = $454.25
• $1225.29 – $454.25 = $771.04
• Retiree Pays $771.04 per month
Use the Medical Plan Chooser to determine your rates:
https://uc2013.chooser2.pbgh.org/
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UCRP Monthly - Income
Other Insurance
• FSAs
– Option for COBRA on Health FSA
• Disability
– No options for conversion
• Legal Insurance
– May continue if currently enrolled
• Life Insurance
– Conversion and/or portability may apply
– Premiums may be much higher
• AD&D (Accidental Death & Dismemberment)
– Options for conversion
– Separate Retiree AD&D Plan
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Are ‘You’
Ready to Retire
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Resources
‣ Contact UCSF HR/Benefits 90 days prior to your
retirement date for your Personal Retirement Profile
and UCRP Election materials
‣ At Your Service
‣ http://atyourservice.ucop.edu/
‣ Review the Retirement Handbook
‣ Review Medical Plan Rates at Retirement (medical plan chooser)
‣ https://uc2011.chooser2.pbgh.org/
‣ At Your Service Online
‣ https://atyourserviceonline.ucop.edu/ayso/
‣ View UCRP Service Accruals
‣ Personalized retirement estimates
‣ Update Beneficiaries
‣ Fidelity Focus on Your Future
‣ http://www.ucfocusonyourfuture.com
‣ Retirement Planning Tools
‣ Financial Education Workshops
‣ Customer Service – for questions on process/transactions
‣ 1-866-682-7787
‣ Planning and Guidance Consultant (PGC) – for financial planning and
consulting services
‣ 1-800-558-9182
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Thank You for Attending!
UCSF Human Resources
Benefits Services
3333 California Street—Suite 330
Telephone: 415/476-1400
Fax: 415-476-2328
Email: benefits@ucsf.edu
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