KEY FEATURES OF DEFERRED LIFETIME INCOME

Features in detail

Deferred Lifetime Income is a type of deferred income annuity, known as a Qualified Longevity Annuity Contract (“QLAC”). You make a one time purchase of Deferred Lifetime Income between the ages of 62-69 during an annual purchase window. The insurance company holding the annuity contract will start paying a monthly benefit when you turn age 78.

Click each feature on the left to see how Deferred Lifetime Income works. This website only provides general information about Deferred Lifetime Income. Each UC employee’s situation is unique, so be sure to consider your choice carefully.

Each year, the investment management firm that manages the UC Pathway Funds selects an insurance company from whom to buy an annuity for Deferred Lifetime Income though a vetting process.

You are eligible to purchase Deferred Lifetime Income if:

  • You’re a UC Retirement Savings Program (UC RSP) participant between the ages of 62 and 69; and
  • You have a combined pretax account balance of at least $40,000 across the UC 403(b), 457(b), and DC plans; and
  • You have a Social Security or tax ID number and a U.S. mailing address; and
  • You have not previously purchased Deferred Lifetime Income through UC.

Beneficiaries of a primary account holder and recipients of a qualified domestic relations order (QDRO) are not eligible to purchase Deferred Lifetime Income.

You pay the insurer a specific amount of money (the premium) from your UC RSP balance. In 2022, the IRS limit for QLAC purchases is the lesser of 25% of the vested pretax balance of the plan you purchase from, or a lifetime limit of $145,000 per person. The minimum purchase amount is $10,000.

You are responsible for ensuring you do not exceed the IRS limits, so if you have already purchased a QLAC elsewhere, please factor that amount into your purchase. If you’re unsure, you may want to consult your financial advisor. You could be subject to penalties if you exceed the limits.

After the purchase window closes, your purchase amount will be deducted from your account in the UC RSP plan you chose and sent to the insurer.

You can purchase Deferred Lifetime Income from only one UC RSP plan (e.g., 403(b), 457(b), or DC plan). If needed, you can easily consolidate your savings into a single plan to meet your desired purchase amount.

The pretax money you use to purchase Deferred Lifetime Income must be invested in either the UC Pathway Fund 2020 or the UC Pathway Income Fund. If you don’t have enough in one of these UC Pathway Funds to complete your purchase, you can easily exchange money into the fund, as needed.

If you need to transfer money between plans or investment funds, be sure to factor in enough time for your transfer to take place before the purchase window closes. Call a UC-dedicated Fidelity Workplace Financial Consultant at 1-800-558-9182 for assistance.

If you move money out of the required UC Pathway Funds and the balance in those funds drops below the minimum purchase amount before your QLAC purchase is processed, then the highest amount possible subject to IRS limits will be sent to the insurer. If less than $10,000 is available on the last day of the purchase window, your purchase election will be canceled.

The QLAC purchase is subject to market availability and cannot be guaranteed to be available for purchase in any given year. The QLAC is not provided by or guaranteed by SSGA, the University of California, the UC Retirement Savings Program plans, or Fidelity Investments, or any affiliate of SSGA, the University of California, or Fidelity Investments. Once you elect to purchase or purchase a QLAC, you cannot reverse the purchase of the QLAC.

UC Pathway Funds are designed for investors expecting to retire around the year indicated in each fund’s name. When choosing a fund, investors should consider whether they anticipate retiring significantly earlier or later than age 65, even if such investors retire on or near a fund’s approximate target date. There may be other considerations relevant to fund selection, and investors should select the fund that best meets their individual circumstances and investment goals. The funds’ asset allocation strategy becomes increasingly conservative as it approaches the target date and beyond. The investment risks of each fund change over time as its asset allocation changes.

At age 78, you’ll start receiving monthly payments from the insurer that continue for the rest of your life.

When you purchase Deferred Lifetime Income, you have three options to choose from:

  • Single Life. This option will pay you monthly income from age 78 until your death.
  • Joint & Survivor 50%. This option will pay you monthly income from age 78 until your death, and then will pay 50% of your monthly income to your spouse until your spouse’s death.
  • Joint & Survivor 75%. This option will pay you monthly income from age 78 until your death, and then will pay 75% of your monthly income to your spouse until your spouse’s death.

You can find more details on the Your monthly income options page.

When you purchase, you can choose up to 4 beneficiaries for your annuity. If you die before you have received at least the amount of your purchase (your premium), your beneficiary(ies) will receive the remainder.

  • If you purchase the single life option, your beneficiary(ies) can be your spouse or someone other than your spouse.
  • If you purchase one of the Joint & Survivor options, your beneficiary(ies) must be someone other than your spouse.

After the purchase, you can add more beneficiary(ies) or update your beneficiary(ies) by contacting the insurer.

To help you keep pace with inflation, your monthly income will increase by 2% each year after your first full year of income.

When you die, any money you used to purchase Deferred Lifetime Income (the premium) that has not been paid out to you or your spouse will go to your beneficiary(ies).

You can find more details on the Your monthly income options page. 

You are eligible to purchase Deferred Lifetime Income if:

  • You’re a UC Retirement Savings Program (UC RSP) participant between the ages of 62 and 69; and
  • You have a combined pretax account balance of at least $40,000 across the UC 403(b), 457(b), and DC plans; and
  • You have a Social Security or tax ID number and a U.S. mailing address; and
  • You have not previously purchased Deferred Lifetime Income through UC.

Beneficiaries of a primary account holder and recipients of a qualified domestic relations order (QDRO) are not eligible to purchase Deferred Lifetime Income.

Each year, the investment management firm that manages the UC Pathway Funds selects an insurance company from whom to buy an annuity for Deferred Lifetime Income though a vetting process.

At age 78, you’ll start receiving monthly payments from the insurer that continue for the rest of your life.

When you purchase Deferred Lifetime Income, you have three options to choose from:

  • Single Life. This option will pay you monthly income from age 78 until your death.
  • Joint & Survivor 50%. This option will pay you monthly income from age 78 until your death, and then will pay 50% of your monthly income to your spouse until your spouse’s death.
  • Joint & Survivor 75%. This option will pay you monthly income from age 78 until your death, and then will pay 75% of your monthly income to your spouse until your spouse’s death.

You can find more details on the Your monthly income options page.

You pay the insurer a specific amount of money (the premium) from your UC RSP balance. In 2022, the IRS limit for QLAC purchases is the lesser of 25% of the vested pretax balance of the plan you purchase from, or a lifetime limit of $145,000 per person. The minimum purchase amount is $10,000.

You are responsible for ensuring you do not exceed the IRS limits, so if you have already purchased a QLAC elsewhere, please factor that amount into your purchase. If you’re unsure, you may want to consult your financial advisor. You could be subject to penalties if you exceed the limits.

After the purchase window closes, your purchase amount will be deducted from your account in the UC RSP plan you chose and sent to the insurer.

You can purchase Deferred Lifetime Income from only one UC RSP plan (e.g., 403(b), 457(b), or DC plan). If needed, you can easily consolidate your savings into a single plan to meet your desired purchase amount.

The pretax money you use to purchase Deferred Lifetime Income must be invested in either the UC Pathway Fund 2020 or the UC Pathway Income Fund. If you don’t have enough in one of these UC Pathway Funds to complete your purchase, you can easily exchange money into the fund, as needed.

If you need to transfer money between plans or investment funds, be sure to factor in enough time for your transfer to take place before the purchase window closes. Call a UC-dedicated Fidelity Workplace Financial Consultant at 1-800-558-9182 for assistance.

If you move money out of the required UC Pathway Funds and the balance in those funds drops below the minimum purchase amount before your QLAC purchase is processed, then the highest amount possible subject to IRS limits will be sent to the insurer. If less than $10,000 is available on the last day of the purchase window, your purchase election will be canceled.

The QLAC purchase is subject to market availability and cannot be guaranteed to be available for purchase in any given year. The QLAC is not provided by or guaranteed by SSGA, the University of California, the UC Retirement Savings Program plans, or Fidelity Investments, or any affiliate of SSGA, the University of California, or Fidelity Investments. Once you elect to purchase or purchase a QLAC, you cannot reverse the purchase of the QLAC.

UC Pathway Funds are designed for investors expecting to retire around the year indicated in each fund’s name. When choosing a fund, investors should consider whether they anticipate retiring significantly earlier or later than age 65, even if such investors retire on or near a fund’s approximate target date. There may be other considerations relevant to fund selection, and investors should select the fund that best meets their individual circumstances and investment goals. The funds’ asset allocation strategy becomes increasingly conservative as it approaches the target date and beyond. The investment risks of each fund change over time as its asset allocation changes.

To help you keep pace with inflation, your monthly income will increase by 2% each year after your first full year of income.

When you purchase, you can choose up to 4 beneficiaries for your annuity. If you die before you have received at least the amount of your purchase (your premium), your beneficiary(ies) will receive the remainder.

  • If you purchase the single life option, your beneficiary(ies) can be your spouse or someone other than your spouse.
  • If you purchase one of the Joint & Survivor options, your beneficiary(ies) must be someone other than your spouse.

After the purchase, you can add more beneficiary(ies) or update your beneficiary(ies) by contacting the insurer.

When you die, any money you used to purchase Deferred Lifetime Income (the premium) that has not been paid out to you or your spouse will go to your beneficiary(ies).

You can find more details on the Your monthly income options page.