1. society
2. work
3. retirement

Transitioning to Retirement…
introduction for academics
Goals
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Provide information on retirement planning topics
Help identify completed tasks & to-do’s
Assist with strategies for your next phase
Provide resources for additional exploration
Program sessions
1.
2.
3.
4.
Introduction & UCRP income options
Retiree Health Benefits & Social Security
Financial planning for retirement
Work/life transitions
UC Davis Retiree Center
Mission: help retired faculty/staff stay connected to UC Davis
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Provides information to retirees
Supports emeriti association and retirees’ association
Plans programs and day trips
Connects retirees to volunteer opportunities
Assists current employees with retirement planning
Faculty/Academics Retiree Perks
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AggieCard retiree ID card/library card
Email continuation or forwarding
Complimentary retiree parking permit
Discounts at campus venues
 Mondavi Center
 Athletics
 Department of Campus Recreation and Unions
 University Dining Services
UCDEA & UCDRA
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Advocate on behalf of retirees
Represent retirees on campus committees/task forces
Provide support for Retiree Center
Sponsor monthly talks and quarterly meetings
UCDEA—Video Records Project & emeriti awards
UCDRA—staff scholarships
You are not alone…
We are retired longer
1900—1.2 years
1980—13.6 years
1990—18.3 years
2000—19.9 years
Length of Retirement in Years
25
20
15
1900
1980
1990
10
2000
5
0
1900
1980
1990
2000
Stereotypical view of retirees…
The new “un-retirement”
 UCDEA emeriti survey–recent results:
 61% are still teaching; 26% for UC Davis
 43% receive extramural funding
 26% published books, + numerous articles, book chapters
 Leisure activities—travel, spending time with family,
gardening, dining out, theater
UCDEA survey, 2012
Redirection motivations…
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Pursuing personal growth
Sustaining sense of achievement
Searching for purpose
Focusing on what’s unresolved
Staying financially secure
Leaving a legacy
If not now, when?
Your “Transitioning” colleagues…
 Age—60% are 56 – 65
 Years at UC Davis—
 50% have worked fewer than 20 years
 21% have worked 21-25 years
 4% have worked 26-30 years
 25% have worked 31+ years
 Years to retirement
 46% within one to two years
 18% within three to four years
 36% 5+ years
 Participate in 403(b)—100% yes
What do UC retirees miss most?
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Daily challenges
Routine
People
Camaraderie
Interaction
Students
“Our University,” UC newsletter
Five phases of retirement
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Pre-retirement
Retirement
Disenchantment
Reorientation
Fulfillment
Key Successful Transition Approaches
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Resourcefulness
Resiliency
Renaissance Spirit
Time
Ten Principles of Longevity
1.
2.
3.
4.
5.
6.
7.
Join the 100 plan
Refuse to be a “senior citizen”
Promote positive aging in yourself
Be physically active
Maintain a sense of purpose
Stay engaged in meaningful work
Keep up with fields of expertise/begin new
knowledge and skills
8. Know how to manage stress
9. Invest in family, friends, community
10. Be able to adapt
Hudson Institute, Santa Barbara
The road lies bright before us…
University of California
Retirement System (UCRS)
Objectives
• Understand the basics of the UC
Retirement Plan
• Learn how retirement income is calculated
and options for survivors
• Discover the retirement process,
necessary decisions and required
documents
UC Retirement System
UCRP –
A Defined Benefit Plan
• Formula based on:
• Age at retirement
• UCRP service credit
• Highest average plan compensation (HAPC)
• Payment options include:
• Monthly payments or
• Lump Sum Cashout
UCRP –
A Defined Benefit Plan
• Provides:
•
•
•
•
Cost of Living Increases
Survivor Benefits
Disability Income
Death payment
Age Factor
• Increases monthly between age 50 and 60
• Age 55 and 0 months:
.0180
• Age 55 and 1 month:
.0181
• Age 55 and 2 months:
.0182
• Age 55 and 3 months:
.0184
• Age 60 and greater:
.0250
Service Credit
• A measure of time you have participated in
UCRP
• Earned when you receive covered
compensation for an eligible appointment
Sick Leave
• If you:
• Retire within 4 months of separating from the
University, and
• Elect monthly retirement payments, accrued
sick leave is converted to UCRP service credit.
Sick Leave Conversion
• Hours of unused sick leave/2000 hours =
Added service credit
• Example:
• 500 hours sick leave/2000 = .25 year UCRP
service credit
This option does not apply if you elect a
lump sum cashout
Vacation Hours
• With departmental approval, use prior to
retirement date
• Value of any unused hours paid to you.
HAPC—Highest Average Plan
Compensation
• A member’s average monthly
full-time equivalent covered
compensation during the 36
highest consecutive months
Covered Compensation
• Includes:
• Pay received for a “regular and normal
appointment”
• Administrative stipends
• Shift differential
• Does not include (partial listing):
• Pay for summer session or University
extension teaching
• Pay via Honoria, or ‘By Agreement’
Who is Eligible to Retire?
• Members who are at least age 50
and vested
UCRP - Income Formula
Member coordinated with Social Security:
•
•
Service Credit x Age Factor = Benefit %
(HAPC - $133) x Benefit % = basic
retirement income
(HAPC is reduced by $133 in recognition of the
University’s contribution to Social Security)
Sample Calculation Member w/Social Security
• Age: 60 Service: 30 yrs HAPC: $3,000
• Age Factor
.0250
x
• Percent
75%
Years
30
=
HAPC
x
$2,867
Percent
=
75%^
Monthly Income
$2,150
^maximum benefit percent is 100%
Cost-of-Living Adjustment-“Retiree” COLA
• Based on an average of the CPI for
Los Angeles & San Francisco
• Provides:
• 100% of increase up to 2%
• 75% of increase above 4%
• Maximum COLA 6%
Provided each July to retirees who retired
no later than July 1 of the previous year.
Cost-of-Living Adjustment-“Inactive” COLA
• Must retire July 1 or later
And
• Have at least one business day break in
service prior to July 1
• Is the lesser of 2% or the increase in the
CPI
Provides an increase in the HAPC.
Taxes on Retirement Income
• Most of the UCRP benefit is taxable
income when paid except:
• After-tax contributions made by members prior
to July 1, 1983
• Service credit buybacks elected before July 1,
1997
Survivor Benefits
• Death While Eligible to Retire - DWE
• Postretirement Survivor Continuance –
PRSC
• Contingent Annuitant
• Death Benefit
DWE
• If member was eligible to retire at the time
of death:
• Benefit calculated as if the member had
elected to retire on the day after the date of
death with eligible spouse or eligible domestic
partner as contingent annuitant
Postretirement Survivor
Continuance - PRSC
Built in at no cost to retiree (monthly income
option only):
1.
Eligible spouse/domestic partner
or
2.
Eligible child(ren)
or
3.
Eligible dependent parents
Contingent Annuitant
• Lifetime monthly income after Member’s
death
• Designated at time of retirement and
becomes irrevocable
• Separate payment from PRSC
• Can be anyone, including person
eligible for PRSC
• Reduces benefit payable to Member
Survivor Income - Example
Assumptions:
• Employee is 60 at retirement
• Coordinated with Social Security
• The eligible survivor is 60
• Meets definition of eligible survivor.
Survivor Income - Example
Employee
PRSC
CA
Basic
$2,150
$537
N/A
Option A
$1,937
$537
$1,399
Option B
$2,001
$537
$976
Option C
$2,035
$537
$749
Option D
$2,074
N/A
$1,037
Lump Sum Cashout
An alternative to monthly
retirement income, one single
payment approximating the
value of your lifetime monthly
retirement income.
Lump Sum Cashout
Payment Options:
• Partial or Full Distribution Payable To
Member
• Taxable Portion Eligible for Rollover
• To DCP, 403(b), 457(b), IRA, or Another
Qualified Plan
• Nontaxable Portion (After-tax UCRP
Contributions)
• Rollover to DCP After-Tax or Roth IRA
Lump Sum Cashout
What You Forfeit:
• Survivor Benefits
• Basic Death Benefit
• Medical, Dental, Vision, Legal
Sample Calculation Member w/Social Security
• Age: 60 Service: 30 yrs HAPC: $3,000
• Age Factor YearsPercent
.0250
• Percent
75%
x
30
=
HAPC
x $2,867
75%
Monthly Income
=
$2,150
• Lump Sum Cashout: $331,530
Ucnet.universityofcalifornia.edu
Click here
to log in
AtYourService.ucop.edu
Retirement Election
Process
• Request a Personal
Retirement Profile (PRP)
about 3 months in advance
• Apply for CalPERS or
STRS retirement if
applicable
• Review PRP / Make
decisions about retirement
• Complete Election 2
months prior to retirement
Decisions
• Monthly income or lump
sum
• Survivor benefits
• Distribution of CAP funds
• Federal and state income
tax withholding
• Continuation of insurance
Documents Required
• For PRSC photocopy of:
• Marriage certificate
or
• California Declaration of Domestic Partnership
or
• UC Declaration of Domestic Partnership
• Birth evidence for children under age 18
Documents Required, cont.
• For Contingent Annuitant:
• Birth evidence
o Examples: birth certificate, passport, military
records, certificate of naturalization
Reemployment at UC
After Retirement
• Rehire subject to policy limitations
• Rehired retiree must sign UCRP Retired
Employee Election Form
• Reemployment may affect retirement
income and health and welfare benefits
• Detailed information in the Returning to UC
Employment After Retirement Factsheet
UCRP—Additional Benefits
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•
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•
Service Credit Buyback
Disability Income
Basic Death Payment
Capital Accumulation Provision (CAP)
Service Credit Buyback
• Available for:
•
•
•
•
•
Approved leave without pay
Partially paid sabbatical
Noncontributory plan (Plan 02)
Reestablish prior UCRP membership
As of May 2009, expanded timeframe to elect
& additional repayment options
Service Credit Buyback
• Advantages:
• Helps with vesting
• Higher retirement income
• Contributes to eligibility for retiree medical and
dental benefits
• May increase UC contribution for medical and
dental
For additional information see:
The UCRP Buyback Booklet
UCRP Disability Income
• Member has a disability which is
permanent or expected to last 12 months
or longer
• Must be vested (5 years service credit)
• Receive temporary income
• Medical, Dental and Vision may continue
UCRP Death Benefit
• $7,500 paid upon the death of an active,
inactive, disabled or retired member.
OR
• If a UCRP member prior to October 1,
1990 (and death occurs while employed),
one month’s final salary plus $1,500 if
greater than $7,500.
UCRP Death Benefit
Paid to:
• Designated Beneficiary
OR, if none
• First person in the order of succession defined
by the plan
Beneficiary
• Person, trust or other entity you designate
to receive UCRP death benefit, life
insurance, balances in CAP, 401(a),
403(b) and 457(b) accounts upon your
death
• May be changed at any time
• Refer to handout WHO’S your
beneficiary?
Order of Succession
• Spouse or eligible Domestic Partner, or if
none
• Child(ren) or, if none
• Parent(s) or, if none
• Sibling(s) or, if none
• Your Estate
Capital Accumulation Payment
(CAP)
• Allocations in 1992, 1993, 1994, 2002, &
2003
• Distribution/rollover required at retirement
• Taxable upon distribution
• Early distribution penalty may apply
• Account balance available on
AtYourService.ucop.edu
CAP
Distribution Options
• Cash distribution
• Rollover to:
•
•
•
•
DCP
403(b)
457(b)
IRA
UC Retirement System
Distribution Options: DCP,
403(b), 457(b)
• Distribution/rollover optional at retirement
or separation if plan balance ≥ $2,000
• Distribution restrictions & penalties may
apply
• IRS defines Minimum Required
Distributions (MRD)
Distribution Options
• Cash distribution:
• Ad Hoc/as needed
• Systematic withdrawal (monthly)
• Rollover to:
• IRA
• Another employer’s plan
NetBenefits.com or 866 682-7787
DCP After-Tax/Rollover
• Voluntary after-tax contributions
• Contribute 100% of UC salary or $55,000
• Rollovers from another employers 401(a),
401(k), 403(b) and 457(b) public plans
• Interest & earnings tax deferred
• Interest/earnings subject to early
distribution penalties
• Distribution at any time
Minimum Required
Distributions (MRD)
• Must start by April 1 of the year following
age 70 ½
• Are age 70 ½ or older and recently
separated from UC employment
• Payments made by 12/31 each year
thereafter until entire balance is paid
Minimum Required
Distributions, continued
• MRDs not eligible for rollover
• Taxable income in year received; 10%
federal and 1% state automatically
withheld
• Non-compliance penalty by IRS is severe
403(b) Loan at Retirement
• Continue loan payments, or
• Repay in full within 90 days of
retirement (required if you elect a Lump
Sum Cashout)
• If not, then balance considered in
default
• the outstanding loan balance is taxable
income for that year (plus early withdrawal
penalties may apply)
Additional Resources
• UC/HR Benefits:
• ucnet.university of california.ucop.edu
• Fidelity Retirement Services:
NetBenefits.com
• UC Treasurer’s Office:
www.ucop.edu/treasurer/
• RASC
o 1-800-888-8267
o Option 8
o https://secure.ucop.edu/secureapps/ays/csform.html
“Whatever resources of good
health, character, and fortitude
you bring to retirement,
remember also to bring money.”
-Jane Bryant Quinn