Retirement - Frequently Asked Questions
You’ve had a long, successful career at UC and now you’re thinking of the next phase: retirement. The process is fairly easy, but it’s important to plan ahead as the retirement process can be time consuming. You may want to consult a financial expert to ensure a comfortable worry-free retirement.
You can retire and receive UC benefits any time after you become eligible — that is, when you have at least five years of UC Retirement Plan service credit and reach age 50 or 55, depending on which tier of the pension plan you’re in.
Once you’ve decided to retire, you’ll complete the application process and the election of your benefits through the University's Retirement Administration Service Center (UCSC RASC) office. The entire retirement process takes about three months for most members. You can also watch UC’s Preparing for Retirement video presentation.
The following Frequently Asked Questions below are intended as a guide and are not intended to replace retirement counseling from a UC professional.
**Note** Use your back button between questions for easier navigation.
- What is the timing for planning to retire?
- I’m thinking about retirement, but want to learn more first. What do I do?
- Is retirement counseling from RASC confidential?
- Is there a difference between separation and retirement?
- What are my responsibilities around notification that I plan to retire?
- How do I pick a retirement date?
- Does my retirement require special handling if I am an academic working in a quarterly appointment?
- How do I start the retirement process?
- What is UCRP?
- What is vesting?
- How is my retirement benefit calculated?
- What is HAPC?
- What is UCRP service credit?
- What if I worked at another UC? What if I worked at UCSC previously and returned? Is my UCRP service credit still there?
- Where can I see my UCRP service credit?
- What if I have a question about my UCRP service credit?
- What is the effect if I was employed in a position that was furloughed (a Partial Year Career appointment)?
- I had a Leave Without Pay during my career. What are my options?
- What happens to my UCRP contributions?
- Are there Cost of Living adjustments to retirement income?
- What documents do I need for retirement?
- What decisions will I have to make in the retirement process?
- I have a CAP account. What happens to CAP when I retire?
- What do I do with my 403b, 457b, and/or DCP accounts?
- I’m re-paying a 403b loan. How does retirement effect loan re-payment?
- I’m being laid-off. What are my options? Can I retire?
- What benefit premiums will be deducted from final paycheck?
- What happens to my Vacation and Sick Leave Accruals?
- What are my options for my Vacation accrual pay out?
- How can I verify that my sick and vacation accruals are accurate?
- Am I eligible for health and welfare coverage as retiree?
- Are my current dependents eligible for retiree health?
- How much does retiree health coverage cost?
- Can I change my health plans or add dependents to health plans at or after retirement?
- I’m planning to move after retirement. What do I need to consider? How do I change my address?
- I have (or my dependent has) Medicare eligibility. What do I need to do?
- Is COBRA available?
- I’m thinking about a Lump Sum Cashout of my retirement benefit. What should I consider?
- What happens to my Health FSA enrollment at retirement?
- What about my medical plan with HSA (Health Savings Account)?
- What happens to my UC life insurance and/or AD&D (Accidental Death & Dismemberment)?
- What happens to my Supplemental Disability enrollment?
- What about my non-benefits deductions from pay (e.g. parking, housing, Cal Casualty, United Way, additional taxes, UCSC loan repayments, wage garnishments, etc.)?
- What if I change my mind and decide not to retire?
- What tax forms will I receive after retirement?
- What happens when I die?
- Who do I contact after retirement for help?
- What about returning to UC employment after retirement?
- How do I stay connected to UCSC?
It is recommended to start the official retirement process with RASC three to four months before the date you wish to retire. At that time, you will be asked to submit a Request for Retirement Initiation Packet. RASC will reserve a retirement date for you up to 90 days ahead of the stated retirement date.
During the year or so before you wish to retire, you can prepare by doing the following:
- Check with UCSC Benefits Office website to learn about retirement planning workshops
- Contact Fidelity Retirement Services to use tools and other information to help you prepare for retirement
- Meet with your tax advisor or financial planner
- Check your eligibility for Social Security and Medicare benefits
- Contact past employers to find out if you qualify for retirement income from other plans
- Gather required documentation, including birth certificates, marriage/domestic partnership certificates
- Log into AtYourServiceOnline and view your retirement estimate. The retirement estimator tool will make projections based upon your current salary and service credit. You can click on “View More Monthly Income Options” to obtain estimates based on information you put into the estimator tool.
- Read the Retirement Handbook.
- Log into MyUCRetirement using your Fidelity Retirement Services login (this may be a different login than your AtYourServiceOnline login). At this site, you may view your Retirement Readiness Score which is based upon UCRP data gathered annually. You can model retirement scenarios and include other sources of retirement income such as Social Security, 403b savings, etc.
- Attend a workshop. Workshops on UCRP or on Retirement Savings Program are regularly held. Please reserve your attendance.
- Attend a Live Webinar. Please reserve your attendance.
- Schedule a one-on-one meeting with a workplace planning and guidance consultant from Fidelity Retirement Services at 1-800-558-9182 or enroll online.
Yes, counseling received from RASC is confidential and remains so until the point that you sign the form electing to receive retirement income. Your retirement counseling may not be shared with your campus until your retirement election form is signed. For this reason, it is very important that YOU notify your supervisor and HR analyst of your intent to retire in writing. In fact, it is your responsibility to inform your supervisor in writing that you plan to retire. If you’re not sure how to compose a resignation letter, contact your Employee & Labor Relations analyst or Academic Human Resources Coordinator.
Notifying your supervisor or dean in advance will allow the campus to formally separate you from UC employment, for the correct reason and will allow sufficient lead time in order to allow a smooth transition from receiving employment income to receiving retirement income, and any health plan benefits for which you qualify, from the UC Retirement Plan.
Yes. Separation simply means leaving UC employment. Retirement is your election to receive income from UC’s Retirement Plan. Your retirement must follow your separation. You may not be both employed and retired from UC on the same date. Often, retirement is the day following your separation. Even if that day is a weekend or a holiday.
- Your separation date is the last day of employment at UCSC in any capacity
- Your separation date is last day you receive pay at UCSC including sick leave pay, holiday pay, vacation pay, catastrophic leave pay, etc.
- Your retirement date is the first day you receive retirement income from UCRP
You are responsible for notifying your supervisor or Dean that you are resigning your position at UCSC and for providing the reason for your resignation is “retirement”-IMPORTANT: please specify retirement in your resignation, for the sake of clarity.
Academic and staff employees should notify their department manager on their decision to retire about three months before the retirement date.
Your resignation letter must contain at least the following two facts:
- YOUR SEPARATION DATE and
- the last day you will receive pay of any kind from UCSC (including sick or vacation pay)
- YOUR REASON FOR RESIGNING
- you should specifically state that you are retiring
- you do not need to include your retirement date in your resignation letter; you may include the retirement date, but it is not recorded in the payroll system, so is unnecessary
Your Personal Retirement Profile (PRP), created for you by RASC, contains your separation date in section 2 of the Profile. You may use the Separation date from the PRP in your resignation letter. Do NOT use the Retirement date/Cashout date as your date of resignation. In other words, your retirement date MUST follow your separation date. You cannot be both employed by UC and retired from UC on the same day, so the retirement date is often the day following your separation date.
If you accrue vacation and want to use it leading up to your retirement, you need to get departmental approval first. In this case, your resignation date is the last day you receive vacation pay and your retirement date may be no earlier than the next day.
As a vested member, you have the right to elect ANY date to retire following your separation from UCSC employment. You may not be both employed and retired from UC on the same date. Because of academic and financial calendars, many members elect to retire on July 1.
Your retirement date cannot be earlier than the day after your separation date (your last day of UC employment). You may retire on any day following separation from employment, including weekends and holidays. For example, if your separation date is a Friday, you may retire on Saturday and there is no need to wait for the next business day.
Note that if you retire more than 120 days after your separation date, you will not be eligible for coverage under UC’s retiree health coverage.
Does my retirement require special handling if I am an academic working in a quarterly appointment?
Perhaps yes. Faculty, Lecturer and other academic appointment have established pay dates, based on the academic calendar. Often, Pay Dates and Service Dates for academic appointees don’t perfectly align. For example, the Pay dates for the Fall Quarter commences on July 1st, but the academic quarter or Service Dates customarily begin in late September or early October, when classes begin. Talk to your academic HR coordinator for more information on pay dates and service dates.
Contact RASC at 800-888-8267, press option #3 to be connected directly to the retirement counseling unit to begin the retirement process. You will be asked to submit a Request for Retirement Initiation Packet. in order to collect your information in order to prepare your retirement documents.
It is recommended to start the retirement process three months before you intend to retire. You cannot reserve a retirement date more than 90 days out from the current date. Of course, you can begin your planning and preparation much earlier.
University of California Retirement Plan (UCRP or the Plan) is a tax-qualified governmental defined benefit plan. Eligible employees automatically become members of UCRP as a condition of employment. UCRP also provides disability and death payments and, for certain members, a Capital Accumulation Payment (CAP). Your benefits are defined by formulas that vary according to the type of benefits payable (for example, retirement, disability or survivor benefits). The formulas are based on such factors as a member’s salary, age, years of service credit and membership classification. The Plan is funded by employer and employee contributions and interest on investments.
UCRP is the pension plan component of the UC Retirement System (UCRS). UC’s retirement system also includes voluntary savings plans (403b and 457b) and mandatory Defined Contribution Plan (401a). The chart below illustrates the basic structure of UCRS. For more detailed information, please click here.
|University of California Retirement System Plans||Brief Description|
|University of California Retirement Plan (UCRP): a defined benefit plan||A pension plan with four membership classifications and mandatory pretax contributions|
|Defined Contribution Plan (the DCP): a defined contribution plan||A savings and investment plan for mandatory pretax contributions for certain members, voluntary after-tax contributions and rollovers|
|Tax-Deferred 403(b) Plan (the 403(b) Plan): a defined contribution plan||A savings and investment plan for voluntary pretax contributions and rollovers|
|457(b) Deferred Compensation Plan (the 457(b) Plan): a deferred compensation plan||A savings and investment plan for voluntary pretax contributions and rollovers|
Your retirement UC Retirement Plan benefit is calculated using a formula based on the following factors:
- your age as of the date of retirement
- your UCRP service credit
- your salary, expressed as your Highest Average Plan Compensation (HAPC)
- your membership classification
To vest means to acquire certain rights. Once vested, you generally have a non-forfeitable right to receive UCRP retirement benefits upon leaving the University and reaching retirement age. You must earn five or more years of UCRP service credit to be vested.
You become vested in your Plan benefits whether you earn all service credit as a member in one UCRP membership classification or tier or in multiple UCRP membership classifications and tiers.
Buyback Needed for Vesting? If you are an active UCRP member with less than five years of service credit and you are laid off or your appointment is eliminated for budgetary reasons, you may be able to establish service credit for vesting purposes through a lump sum, after-tax service credit buyback. Service credit may be bought back for an approved leave without pay, sabbatical leave, extended sick leave, or temporary layoff, or for earlier periods of employment for which UCRP contributions have been refunded. Generally, elections to buy back service credit and payment must be made before you leave University employment. See the UCRP Buyback Booklet. for more information.
HAPC stands for Highest Average Plan Compensation. Your HAPC is your average monthly full-time equivalent compensation, including any stipends, during the 36 continuous months preceding retirement in which compensation was the highest. Periods of approved leave of absence without pay are excluded from the 36 month averaging; your compensation for service before and after a leave, or before and after a period of inactive membership, is considered continuous.
A measure of time you have participated in the Plan in one or more membership classifications. Service credit is used to determine eligibility for most benefits and to calculate benefits such as monthly retirement. You earn service credit whenever you receive covered compensation for an eligible appointment. Part-time or variable-time work results in a proportionate amount of service credit. For example, if you work 50 percent time for one year, you receive ½ year of service credit.
Please note: UCRP service credit and Employment Service Credit are different measures of your work at UC. Employment Service Credit (sometimes called Vacation Service Credit) may not correspond to the amount of service credit you have accrued in the UCRP system or to your seniority for layoff units. (For more about service credit definitions, please visit the UCSC Staff Human Resources website and search for “service credit”.)
What if I worked at another UC? What if I worked at UCSC previously and returned? Is my UCRP service credit still there?
UCRP service credit is accrued on a systemwide basis, across all campuses and medical centers. If you previously accrued UCRP service credit and did not receive a refund of accumulations, the service credit will be on record. The service credit may not be viewable on AtYourServiceOnline after an extended period of inactivity (no pay), but will become activated again when you begin to receive pay from UC.
You may view your UCRP service credit on AtYourServiceOnline. You must register a username and password to view your personal information and you view your UCRP service credit totals under the Retirement and Savings tab. UC Retirement Plan service credit accruals are updated on a monthly basis, whether you receive monthly or bi-weekly pay, around the 10th of each month.
You may contact RASC with questions on your service credit total. If you have accrued less service credit that you thought, the reason may be due to a period in your career where you were on Leave Without Pay or worked a reduced/part-time schedule. Additionally, if you were hired as a limited employee, the limited periods are not generally counted toward your UCRP service credit because membership requirements were not met. UCRP service credit begins to accumulate on the date when you satisfy membership requirements.
If you believe that your service credit total is incorrect, you may request UCRP service credit verification from RASC. You may be asked to provide specific dates for review and supporting documents, such as earnings statements (pay check stubs), for the time in question for a service credit verification. Service credit verifications generally take 6-8 weeks for completion.
What is the effect if I was employed in position that was furloughed (a Partial Year Career appointment)?
Currently, full-time, partial-year Career (PYC) employees (who work 100% time during a 9-, 10-, or 11-month appointment) receive one year of UCRP service credit for each Plan year.
Similarly, part time, partial-year Career employees receive prorated service credit. For example, if you work 50 percent time during a partial-year appointment, you earn ½ year of service credit.
How retirement calculation with PYC works: For a member on a partial-year career (PYC) appointment, compensation earned on a 9-, 10-, or 11-month appointment is spread over a year to determine your annual full-time equivalent (FTE) compensation and compensation for each month within the 12-month period is treated as 1/12th of the total amount. In other words, your eligible pay in the 9-, 10- or 11- month PYC appointment is spread out over 12 months to arrive at your HAPC equivalent. Your HAPC attributable to service while on a PYC appointment is based on the 36 continuous months that produce the highest compensation and furloughed periods (where no compensation was received) are excluded.
IMPORTANT NOTE: If you were employed for a portion of your career in an appointment that was partial-year career (if your job was furloughed), RASC will perform a manual calculation to determine your retirement benefit income. The on-line estimator tool will NOT be accurate for members who earned a combination of UCRP service credit in year-round appointments and furloughed appointments. Talk to your UC RASC retirement counselor for more information about the calculation of UCRP service credit.
You earn no UCRP service credit for any unpaid leave periods. Before you retire, you might want to consider buying back retirement service credit for the time you were on leave. Generally, the cost of a leave buyback depends on when the leave occurred, its length, your age, and how long you wait to elect the buyback. To obtain an estimate of the cost of a buyback, log into AtYourServiceOnline and use the Leave Buyback Estimator tool under “Retirement and Savings” tab or contact RASC. You may also refer to the UCRP Buyback Booklet for buyback eligibility rules.
You may calculate the cost of a UCRP service credit buyback by logging in to AtYourServiceOnline and looking under the Retirement and Savings tab for Leave Buyback Estimator.
Your UCRP contributions remain in a trust in order to fund your retirement Plan benefits. UCRP contributions are deducted automatically from your gross wages each pay period and credited to your individual member account. Wages on which contributions are assessed are called covered compensation. Plan benefits are funded by contributions from both the University and active members and by the investment earnings on Plan assets. These contributions are placed in a trust fund and constitute a single pool of assets. The Plan Administrator maintains a record of each member’s UCRP contributions and credits the amount with interest at a stated rate. University contributions are not recorded on an individual member basis.
Yes. After receiving retirement benefits for one full year, UCRP members are eligible to receive an annual cost-of-living adjustment (COLA), starting on the following July 1. The COLA is based on the Consumer Price Index (CPI) increase for the preceding year. COLA’s for the upcoming July 1 are announced annually on UCNet the first week April.
You will be notified in advance if you need to provide documentation along with your UCRP benefit election.
The following are UC Retirement Administration’s general requirements: birth evidence for your contingent annuitant or children under 18; proof of marriage/domestic partnership documents for your eligible survivors. Refer to page 23 of the Retirement Handbook for more information. Proof of marriage or domestic partnership documents must date to at least one year prior to one’s retirement date and the marriage/partnership must still be in force as of the retirement date to qualify for survivor eligibility.
SPECIAL NOTICE FOR DOMESTIC PARTNERS: If your domestic partnership is not registered with the state of California, submit form UBEN 250 Declaration of Domestic Partnership and three supporting documents (find form and acceptable documents in the booklet Benefits for Domestic Partners.pdf). If you do not submit this form, your domestic partner cannot submit the form after your death, and he or she will NOT be eligible to receive survivor benefits. UC Human Resources will use the earliest date established by the documentation as the beginning date of the domestic partnership. For your partner to be eligible, you must submit the documentation prior to your retirement and it must establish that the relationship began at least one year prior to your retirement.
You will have many decisions to make. The Election Interview Planning Worksheet summarizes the decisions you must make when you elect a retirement benefit. The Election Handbook will be provided to you with your Personal Retirement Profile (PRP) and retirement packet to give you time to prepare. It is highly recommended to read the entire Election Handbook, which contains the worksheet, and form questions BEFORE your telephone election interview.
Your RASC Retirement Counselor cannot give you financial or tax advice. Before you make any decisions, you are urged to speak with your family and/or with a trusted financial advisor to fully understand tax implications on your decision to retire. See the Special Tax Notice for UC Retirement Plan Distributions for more information.
Within four to six weeks following your election, you will receive a confirmation of your retirement election choices. Carefully review this document for accuracy. Your confirmation statement outlines your retirement income and when you will receive your first retirement benefit payment.
If you were a member of UCRP on specific dates between 1992 and 1994 and/or between 2002 and 2003, you may have been eligible for UCRP’s Capital Accumulation Payment (CAP). The CAP provides eligible members with a supplement to their other UCRP benefits.
You are required take a distribution of your CAP balance, if any, when you elect monthly retirement income or a lump sum cashout or if you are approved for UCRP disability income. The CAP distribution is eligible for rollover. You may view your CAP balance, if any, on AtYourServiceOnline.
You can continue to keep your retirement savings in the UC Retirement Savings Program even when you are not working for University of California or have retired, provided the minimum balance requirement is satisfied. You have the option to move your money too. Call Fidelity Retirement Services, record keeper for UC’s Retirement Savings Program, at 1-800-558-9182 with any questions or to discuss your options in greater detail.
You must arrange one of the following with Fidelity Retirement Services within 90 days of your last day on pay status:
- make monthly loan re-payments (payments cannot be deducted from monthly retirement income)
- repay the outstanding loan amount in full
If the loan defaults due to non-payment, the outstanding principal will be treated as a taxable distribution.
If you eligible by age and vesting rules and want to retire from UC, you may elect to retire following a lay-off from UC employment. You may also become an inactive member of UCRP following your lay-off and delay receiving retirement income to a later date of your choice. Note that if you retire more than 120 days after your separation/layoff date, you will not be eligible for University retiree health coverage.
It is important to understand that vesting with UCRP is an entitlement you’ve earned, regardless of your reason for separating from University employment. If you have questions about your layoff options (e.g. severance or preferential rehire), please consult with your UCSC Human Resources professional.
NOTE: If you elect to retire immediately following a layoff, please contact the UCSC Benefits Office for assistance as soon as possible because you may be eligible for continued health coverage as a retiree, which will require special handling.
When you resign, stating your reason as “retirement”, an additional full month of health and welfare premiums will be paid by both the University and you and these premiums will apply to your final paycheck. For example, if you resign on June 29th to “retire”, your UC health plans will continue as an employee through July 31st. The additional month of premiums is intended to facilitate a smooth transition from employee benefit coverage to retiree benefit coverage. This additional month of premiums and coverage applies whether or not you are eligible for continued UC health coverage as a retiree. For this reason, specifying your reason for resignation as “Retirement” is so important; resignation for any other reason besides retirement will prompt your health and welfare coverage and premiums to terminate on the last day of the month in which you separate. For example, if you resign on June 29th for “Retirement”, your UC health plans will continue as an employee through July 31st, but if you resign on June 29th for “Resignation-no reason given” your UC health plans will terminate on June 30th.
You will be paid for any vacation time earned through your last day of work (your date of separation) on your terminal paycheck when you leave UC employment to retire.
If you elect monthly retirement income, your unused sick leave will be converted to additional UCRP service credit. If you elect lump-sum retirement income, you will not be paid for any accumulated sick leave.
You may not convert sick leave in order to meet vesting requirements with UCRP.
You will receive pay for your unused vacation time earned as income paid to you. To defer your income “vacation payout” to your tax-deferred retirement savings plan, you may elect to start, change or increase your voluntary contributions to UC Retirement Savings Program 403b and or 457b. Contribution elections are subject to payroll deadlines and Maximum Allowable Contributions (MAC).
Note: According to IRS rules, enrollment in the 457(b) Plan cannot go into effect immediately. Enrollment and changes to enrollment affects earnings for the month following enrollment and the deduction is taken from the paycheck on the first of the subsequent month. For example, if you enroll or change your 457(b) contribution in May, the enrollment or change is reflected on your July paycheck(s).
Contributions to the 403(b) and 457(b) Plans are reported annually on employees’ W-2 forms, but are not included in income subject to taxation.
Retiree health eligibility is described in detail on the UC Net website. Currently, UC contributes toward the monthly cost of medical and dental coverage, but the contributions may change or stop altogether. Health and welfare benefits are not accrued or vested benefit entitlements.
Generally, if you elect monthly retirement income and you meet UCRP service credit requirements, you may be eligible to continue your UC medical, dental, vision, legal and/or AD&D coverage if:
- You were enrolled when you left UC employment; and
- You elect to continue coverage at the time of retirement; and
- Your retirement date is within 120 days of your separation from employment; and
- Your coverage is continuous until the date your retirement income begins.
Vision coverage in retirement is not funded by UC, but you may continue coverage by paying premiums directly to the vision plan. Your retirement counselor will provide you with a vision plan continuation form and enrollment deadlines. Premiums for vision coverage cannot be directly deducted from UC retirement income. Occasionally, UC offers retiree vision coverage to eligible retirees during Open Enrollment, but not every year.
Dependent eligibility for retiree health is generally the same as for UC employees. Please refer to the Group Insurance Eligibility Factsheet for Retirees and Eligible Family Members.
Currently, UC contributes toward the monthly cost of medical and dental coverage, but the contributions may change or stop altogether. The amount UC will contribute depends on the date you were hired and the amount of service credit you have earned. More information is on the UC Retiree health and welfare benefits website. You will be provided with your estimated retiree health costs with your Personal Retirement Profile (PRP).
Additionally, medical and dental premiums and plan options are renewed each year and are communicated during the annual Open Enrollment for UC Employees and Retirees. Look for the next year’s premium and plan information in October on UCNet.
Generally, retirement by itself doesn’t provide an opportunity to change your health plans. However, you may be able to change plans if you have a qualifying event at the same time as retirement (e.g. if you move out of a plan’s service area). Changes must be requested via written request within 31 days of a qualifying event. Consult with your RASC Retirement Counselor to discuss your options.
After retirement, health benefits Open Enrollment for Retirees occurs annually in autumn during the same period for employee Open Enrollment. Changes made during Open Enrollment become effective the following January 1st. If you retire and experience a family status change (e.g. new marriage or birth/adoption of a child) you may be eligible to enroll newly eligible family members within a 31-day Period of Initial Eligibility (PIE). Contact UC Retirement Administration (UC RASC) right away following a family status change to learn your options. Changes must be requested via written request within 31 days of a qualifying event.
You should consult with RASC to discuss your options for health plans and take action to keep your address up-to-date on the AtYourServiceOnline website both before and after you retire. Different plan options may be available for out-of-state retirees. If you are moving immediately after retirement, discuss your options with your RASC Retirement Counselor as part of your retirement counseling.
Generally, if you are moving within the state of California, you may not need to change medical plans, but you should still discuss any address changes with your retirement counselor. If you are moving out of California work with your RASC Retirement Counselor and the Retiree Health unit at RASC to determine your options.
If you and your family members are Medicare eligible and you move out of California, you will work with Extend Health and UC will provide an annual contribution under an HRA-health reimbursement arrangement- to help pay for the Medicare plan you choose. Click here for more information on Extend Health.
If you or an eligible family member loses eligibility for medical, dental or vision coverage, or for the Health Flexible Spending Account you may be COBRA-eligible.
If you elect Lump Sum Cashout or are otherwise not eligible for continued UC health coverage as a retiree, you may be able to continue coverage through COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) for a limited time. You have 60 days from the date of the qualifying event (your last day of UC employment, for example) or the date you receive notice of your continuation rights, whichever is later, to enroll in COBRA.
Health Flexible Spending Account (FSA) participation is not available for continuation directly from retirement income. If you wish to continue participation in Health FSA following retirement, you will need to elect continuation through COBRA.
UC’s COBRA administrator CONEXIS will mail a COBRA election document to your home address of record, following your separation date.
PLEASE NOTE: You will receive a “Loss of Creditable Coverage” notice due to termination of your employee medical coverage following your separation to retire. Also, CONEXIS, the University’s administrator for COBRA, will send information on enrolling in the medical, dental and vision plans as a COBRA participant. These notices are sent in compliance with Federal requirements. If you are eligible for coverage as a UC retiree, please disregard this information.
If you are enrolled in a UC-sponsored medical plan after retirement and you or any of your enrolled family members are or become eligible for Medicare, UC requires that you (or the family members) enroll in both Medicare Parts A and B. More information about UC’s Medicare requirements is in the Medicare Factsheet. If you don’t enroll in Medicare or don’t keep up with your Medicare premiums, you could lose your UC retiree health coverage.
Your RASC Retirement Counselor should provide you with a signed Request for Employment Information to provide to Social Security Administration about 2 months before your Medicare Part B coverage start date and additional forms for coordinating your (or your family members’) UC Retiree Health benefits with Medicare. You may also obtain the Request for Employment Information form from the Social Security Administration and your UCSC Benefits Office or your UC RASC retirement counselor can complete the form for you.
As an alternative to monthly retirement income, you can choose a lump sum cashout of your retirement benefits. The Lump Sum Cashout is the “actuarial equivalent” of the present value of a UCRP member’s lifetime retirement income.
If you elect Lump Sum Cashout at retirement, you (and your family members) forfeit the following:
- eligibility to be covered by UC retiree health benefits
- survivor benefits (postretirement survivor continuance of income)
- contingent annuitant benefit
- sick leave conversion to UCRP service credit
- basic death payment of $7,500
- additionally, you may not return to work at UC for more than 43 percent-time
The Lump Sum Cashout is subject to federal and state taxes in the year you receive it. See the Special Tax Notice for UC Retirement Plan Distributions for more information.
COBRA continuation of coverage is available for members electing Lump Sum Cashout.
Your participation in Health FSA (Flexible Spending Account) stops automatically when you stop receiving employment income. Retirement income is not eligible income for making pre-tax Health FSA contributions.
If you have not exhausted your Health FSA balance and you wish to continue your Health FSA participation, you may be eligible to continue your participation through COBRA continuation and after-tax monthly contributions. You will receive a COBRA continuation of coverage packet to elect continuation. Contact CONEXIS directly to elect Health FSA continuation or with any questions on your Health FSA account.
Dependent Care FSA is not available for continuation through COBRA. You can still be reimbursed for eligible expenses you incurred through the end of the pay period for which you made your last contribution. Be sure to submit your claims to CONEXIS by the filing deadline for the year in which your expenses were incurred; otherwise you’ll lose any money left in your account.
You may continue your coverage as a retiree in UC medical plan with HSA, provided you continue to meet the HSA eligibility requirements:
- you must reside in U.S. and
- you and your covered family members are NOT eligible for Medicare.
If you or your family member(s) have Medicare Part A or B entitlement at retirement OR your are moving out of the United States, you must change your medical plan. Contact the Plan for more information and discuss with your RASC Retirement Counselor.
Basic (University-paid), Supplemental and Dependent Life (employee-paid) coverage ends on the last day of the month for which premiums have been paid, generally the last day of the month following your separation for reason of Retirement. University-paid and employee-paid life insurance coverage may be converted to an individual whole life policy without a medical exam. Employee-paid life insurance coverage has a portability provision for group term life insurance, with restrictions. Employees and dependents may convert coverage or apply for portable coverage, but may not do both. You must submit an application and the required premium to The Prudential Insurance Company within 31 days from the date your coverage ends. See premium rates at: Converting Group Term Life to Individual Insurance or Group Term Life Portability Rates. If you decide to purchase coverage, please request the Notice of Group Life Conversion form or the Portability Election Form from the UCSC Benefits Office, as applicable.
Employee AD&D ends on the last day of the month for which premiums have been paid, generally the last day of the month following your separation for reason of Retirement. Accidental Death & Dismemberment plan designed for Eligible Retired Persons of UC is available. Contact AIG at 800-772-7863 to inquire.
Disability coverage ends on the last day of active employment. There is no option for continuation of coverage.
What about my non-benefits deductions from pay (e.g. parking, housing, Cal Casualty, United Way, additional taxes, UCSC loan repayments, wage garnishments, etc.)?
These are not available for continued automatic deduction from retirement income. For any “other” automatic withdrawals from your pay, contact the office that administers the program to make arrangements to continue participation.
After you (and your spouse/domestic partner) sign the Monthly Retirement Income election form or the Lump Sum Cashout election form to start retirement, you may rescind your retirement election in writing to RASC in compliance with your established deadline.
Once you (and your spouse/partner, as applicable) have signed your retirement election form, you have communicated your intent to retire and, as part of signing the election form, you agree to the following:
"I will have the option to cancel my election to retire until the later of: my retirement date or 15 days from the date my confirmation letter is sent. I understand that after this deadline my election of monthly retirement income and my choices of payment option and contingent annuitant (if any) are irrevocable.”
If you retired mid-year, separate tax documents will be issued for your employment income (W-2) and retirement income (1099R). The Affordable Care Act includes requirements for employers regarding health care coverage and tax reporting. If covered by employee medical, you will receive a 1095-C form; if covered by retiree medical and/or Medicare, you will receive a 1095-B form. AtYourServiceOnline retains both employment and retirement tax documents for retrieval. You will have to register a user name and password to access tax documents.
It is recommended to check the AtYourServiceOnline website for accurate address and e-mail information each year under My Contact Information.
At retirement, you will be required to identify any family members [e.g. spouse/domestic partner, underage child(ren), overage dependent child(ren)] who may qualify to receive UCRP postretirement survivor continuance. Survivors should be directed to call UC RASC at 800-888-8267 when a retiree dies. Death benefits, including basic death payment from UCRP and income for eligible survivors of UCRP Retirees receiving monthly income may be available. Fidelity Retirement Services will assist with distributions to beneficiaries from accounts in the UC Retirement Savings Program (403b, 457b, DC Plan).
RASC is your contact for customer service questions including benefit payments, retirement income verification (for loans, etc.), taxes from retirement income, direct deposit, address updates etc.
Your UCSC Health Care Facilitator is available to help with health plan-related questions, including Retiree Open Enrollment and Medicare enrollment.
UC retirees are a valuable resource, providing UC with institutional knowledge, research resources and experienced replacements when needed. The University’s policy on reemployment of retired employees is designed to protect the University’s reputation and ensure compliance with IRS pension distribution rules while continuing to give managers the flexibility to call on retired employees when needed. Please read UCRP Returning to UC Employment After Retirement Factsheet for more information (http://ucnet.universityofcalifornia.edu/forms/pdf/returning-to-uc-employment-after-retirement.pdf).
Certain restrictions apply
Because UCRP must comply with IRS pension distribution rules, you can’t discuss re-employment until after you’ve received your first retirement payment, or 30 days after you’ve ended UC employment-whichever is later- if you haven’t reached normal retirement age.
All UCSC retirees are invited to join the UCSC Retirees Association. The UC Santa Cruz Emeriti Association is available for retired faculty members too. There are many opportunities available to you to stay in touch at regularly scheduled events.
Following your retirement from UCSC you will receive a UCSC Retiree identification card and information for use in accessing privileges that may include parking, library, recreational facilities, e-mail accounts and reduced fee enrollment at UCSC.