If you are newly hired or newly eligible for the UC Retirement Choice Program, you have an important decision to make. You’ll need to decide which UC primary retirement plan you want to participate in—Pension Choice or Savings Choice. The sooner you make your choice, the sooner you start receiving UC contributions (and service credit under Pension Choice).
Here’s an overview of each option.
Eligibility
You are eligible for a choice of primary retirement benefits if you:
- Were hired into an eligible faculty or career staff appointment on or after July 1, 2016; OR
- Completed an hours requirement on or after July 1, 2016—generally, 1,000 hours worked within a 12-month period; OR
- Were rehired into an eligible faculty or career staff appointment on or after July 1, 2016, following a break in service. Generally, a break in service occurs if you have left UC employment for one full calendar month or more.
If you were participating in the UC Retirement Plan (UCRP) on June 30, 2016, you will continue to participate in your current plan and will not need to choose a primary retirement benefit option. Also, if you’re represented by a union, your retirement benefits are governed by your union’s contract with UC. As a result, your benefits may be different from the benefits outlined here. Please refer to your collective bargaining agreement for details.
Your primary retirement benefit options
Both Pension Choice and Savings Choice can help you build valuable retirement income, in addition to Social Security benefits and any other retirement income you may have.
What you need to do
If you're eligible for the UC Retirement Choice Program, it pays to enroll as soon as you've made your choice—within 90 days of your hire date or qualifying appointment eligibility date. (If you are uncertain about your eligibility date, please call the UC Retirement Administration Service Center at 1-800-888-8267.)
You can compare options and make your selection at myUCretirement.com/choose.
If you don't make an active choice, you automatically will be enrolled in Pension Choice when your 90-day selection window ends.
Here’s a snapshot of your options
For complete details, see your Summary Plan Description.
| Pension Choice | Savings Choice |
|---|---|
| How it works | |
|
Pension Choice includes a monthly pension benefit under the University of California Retirement Plan (UCRP), for predictable lifetime retirement income based on your eligible pay (up to the PEPRA maximum), service credit and retirement age. The decision to participate in Pension Choice is irrevocable—you cannot change your participation to Savings Choice later. |
Savings Choice works much like a 401(k) plan. Your individual pretax contributions, plus contributions from UC (based on your eligible pay1), accumulate in a tax-deferred retirement account that you draw from in retirement. You choose your investments from a menu of available funds, and you assume the investment risk. UC provides educational tools and resources to help you plan. |
| Shared Contributions2 | |
New to UC?
Previous UC employee in an eligible appointment for UCRP/CalPERS reciprocity?4
Note: Contributions are made only on pay you earn after you are enrolled, subject to payroll processing cycles. |
You contribute 7% of your eligible pay1, before taxes. UC contributes 8% of your eligible pay, up to the IRS pay maximum. |
| Your retirement income | |
|
When you vest in (become eligible for) benefits: Your contributions to your pension and to your supplemental account (if you have one) are always yours. You vest in your pension benefits and in UC’s contributions to your supplemental account once you have earned five years of UCRP service credit. You begin to earn service credit for your time worked when you start making contributions. New to UC?
Previous UC employee or eligible for UCRP/CalPERS reciprocity?4
UCRP also includes benefits for your eligible survivors, as well as disability income if you become totally and permanently disabled before retirement. Your contributions to your supplemental account, if any, will vest immediately. UC’s contributions will vest after you have earned five years of UCRP service credit or, if earlier, on the date of your death, provided you are actively employed on that date. When you retire, you will be able to draw retirement income from your supplemental account. The balance of your account will depend on the amount contributed by you and UC and on the performance of the investments you select. You can designate a beneficiary for your supplemental account balance. |
When you vest in (become eligible for) benefits: Your contributions to your account are always yours. UC’s contributions will vest after one year. |
About retirement benefit limits
UC pension benefits are limited, consistent with the cap on pensionable earnings under the 2013 California Public Employees’ Pension Reform Act (PEPRA). This limit applies to other California public pension plans and is calculated and reviewed annually. For 2023, the limit is the first $146,042 of annual pay.
In addition, the IRS sets a dollar limit for annual earnings upon which retirement benefits and contributions may be based. The limit is reviewed and adjusted annually. For 2023, this limit is $345,000.
Switching from Savings Choice to Pension Choice
Savings Choice participants have a window of opportunity to switch prospectively from Savings Choice to Pension Choice, and become members of the UC Retirement Plan (UCRP). The second choice window for Savings Choice participants opens on the fifth anniversary of the calendar year in which they made their initial election (if you're represented by a union, your Second Choice Window is governed by your union's contract with UC).
A move from Savings Choice to Pension Choice is effective on July 1 (the beginning of the plan year) following your election, if your election is made on or before May 31.
A switch from Savings Choice to Pension Choice is a change in your primary retirement benefits going forward; it is not retroactive. A switch to Pension Choice during your second choice window means:
- Your Savings Choice account balance will remain yours. Contributions (from you and UC) to your Savings Choice account will stop on the date the change takes effect.
- The service credit you earned as a participant in Savings Choice will count toward vesting in UCRP and toward your retiree health service credit.5 You will begin earning UCRP service credit toward the calculation of your pension benefit on the date your switch to Pension Choice takes effect.
- You will remain in the pension plan for the remainder of your career, even if you separate and return.
Want help with your decision?
Speak with a UC-dedicated workplace financial consultant for help with your options. Schedule a one-on-one session, or call 1-800-558-9182.