HOW IT WORKS

Features in detail

Deferred Lifetime Income is a type of deferred income annuity, known as a Qualified Longevity Annuity Contract (“QLAC”). Buying Deferred Lifetime Income means you are purchasing an annuity certificate from an insurance company. You can use a portion of your UC 403(b), 457(b), or DC plan account to purchase Deferred Lifetime Income now, and then monthly payments will begin at age 78 and continue for the rest of your life.

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 manager that UC chooses to manage the UC Pathway Funds will conduct a vetting process to select an insurance company from whom to buy an annuity for Deferred Lifetime Income. 

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 as of the purchase date; 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.

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 (your premium) from your UC RSP balance. In 2021, QLAC purchases are limited to 25% of the vested pretax balance of the plan you purchase from, or a lifetime limit of $135,000 per person, whichever is less. 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 will receive a welcome packet from the insurer with instructions for accessing your annuity.

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 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 September 10, 2021, 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. The UC Pathway Funds as well as QLACs are not insured by the FDIC or by another governmental agency; they are not obligations of the FDIC or deposits or obligations guaranteed by SSGA, the UC Retirement Savings Program plans or the University of California. 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 the increasing cost of goods and services each year, 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 as of the purchase date; 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.

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 manager that UC chooses to manage the UC Pathway Funds will conduct a vetting process to select an insurance company from whom to buy an annuity for Deferred Lifetime Income. 

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 (your premium) from your UC RSP balance. In 2021, QLAC purchases are limited to 25% of the vested pretax balance of the plan you purchase from, or a lifetime limit of $135,000 per person, whichever is less. 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 will receive a welcome packet from the insurer with instructions for accessing your annuity.

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 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 September 10, 2021, 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. The UC Pathway Funds as well as QLACs are not insured by the FDIC or by another governmental agency; they are not obligations of the FDIC or deposits or obligations guaranteed by SSGA, the UC Retirement Savings Program plans or the University of California. 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 the increasing cost of goods and services each year, 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.