UC Phased Retirement Program

Program Summary  UCSC Implementation Procedures
Overview Procedures for Enrolling
Authority Time Reduction Requirements
Eligibility Changing a Phased Retirement Contract
Details Ending a Phased Retirement Contract
Cash Incentive Formula Deadlines for Processing Contracts
Impact on Benefits Forms/Resources
Transfer, Promotion, Reappointment  

Impact on Benefits

Some employee benefits will not be affected by participation in the program such as:

  • Vacation and sick leave will accrue at the percentage of appointment held prior to approval of enrollment into the program.

  • Eligibility for UC health and welfare benefits such as medical, dental and vision will continue as long as the participating employee maintains an average regular paid time per week of 17.5 hours or greater.

  • An employee’s full‐time equivalent salary rate as of January 1 of the previous year is used to determine the Medical Contribution Base (MCB) for the current year. The MCB will not be impacted by participation in the Phased Retirement Program.

  • UCRP monthly retirement income or lump‐sum cash out will be calculated using Highest Average Plan Compensation (HAPC) based on the monthly full‐time equivalent compensation. The HAPC will not be impacted by participation in the Phased Retirement Program.

Other benefits will be affected because of the reduced salary or appointment rate such as:

  • Holiday pay will be in proportion to the Phased Retirement Program percent of time.

  • During participation in the program, UCRP retirement service credit accrues at the reduced appointment percentage. Employees who participate in the program will earn less service credit toward the UC Retirement Plan.

  • UCRP retirement service credit will be reduced for periods of leave without pay or other periods of time off pay status not reflected in the phased retirement contract. The retirement service credit feature is specific to UCRP and does not apply to UC members of other retirement systems to which UC contributes, such as CalPERS.

  • If an employee dies or becomes disabled while participating in the program, the final salary used to calculate UCRP survivor and UCRP disability benefits will be adjusted to reflect the average percent of time on pay status during the preceding 36 months.

  • Short‐term and Supplemental Disability Benefit Plan benefits will be based on the reduced phased retirement salary. Per current plan provisions, premiums for the Supplemental Disability Plan will continue to be calculated on the full time rate.

  • Workers Compensation disability payments received pursuant to Workers’ Compensation coverage will be based on the participant’s reduced phased retirement salary. Departments will supplement these payments so that the aggregate benefit is equivalent to what would have been received if the payment was based on the pre-phased retirement salary. These department payments are taxable.

  • Basic, Supplemental, and Dependent Life insurance premiums and coverage are based on the fulltime salary rate on January 1 of each year, per current plan provisions. Changes in an employee’s salary rate after January 1 are reflected in the employee’s life insurance amount the following January 1; however, coverage will not be reduced automatically if the employee’s full‐time salary rate is reduced. However, a participant who self‐identifies can request a reduction in Supplemental Life insurance coverage and cost on a prospective basis. For Basic life insurance, coverage will be reduced in proportion to the percentage appointment, per plan provisions.

  • Dependent Care Flexible Spending Account (DepCare FSA) and/or Health Flexible Spending Account (Health FSA) will continue at the same level unless the phased retirement participant changes his or her election during a Period of Initial Eligibility (PIE), where eligible, or during an open enrollment period.

  • Defined Contribution Plan, 403(b) Plan and 457 (b) Plan contributions will be lower if a participant’s contributions are based on a percentage of earnings. Participants may change their contribution amount or the percentage contributed to these plans at any time.

  • Future Social Security and Unemployment Benefits may be lower since these benefits are calculated based on actual earnings.

  • Should a layoff become necessary while the employee is participating in the Phased Retirement Program, all credits accrued will be paid at retirement as a lump sum if the participant retires within 120 days of the layoff. The employee must retire by December 31, 2019 to receive the accrued credits. While employees participating in the Phased Retirement Program are not exempt from involuntary reduction in time, any involuntary reduction in appointment percentages must be in ten percent increments for the employee to receive additional incentive credits.

  • If a participant's position is being considered for layoff while participating in the Phased Retirement Program, the participant's seniority will be calculated based upon the appointment percentage prior to their participation in the Phased Retirement Program.

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