Eligible Pay

Retirement benefits are calculated based on “eligible pay” for the Plan year (from July 1 to June 30), which does not include certain types of compensation, such as:

  • Pay that exceeds the full-time rate or established base pay rates for regular, normal positions;
  • Overtime pay (unless for compensatory time off);
  • Pay that exceeds the base salary (X+X’) under the Health Sciences Compensation Plan.

For a list of types of compensation that are not considered “eligible pay” when calculating retirement benefits, see A Complete Guide to Your UC Retirement Benefits.

Retirement Earnings Maximums

The maximum amount of your compensation that counts toward your retirement benefits may be affected by the 2013 California Public Employees’ Pension Reform Act (PEPRA) maximum and/or the IRS dollar maximum.

PEPRA Pensionable Earnings Maximum

The maximum salary that counts toward your pension benefits each Plan year is consistent with the maximum on pensionable earnings under PEPRA. This maximum also applies to other California public pension plans and is reviewed annually and may be adjusted. For the 2018 Plan year (from July 1, 2018 to June 30, 2019), the maximum is $121,388.

IRS Maximum

The IRS sets a dollar maximum for annual earnings (for the Plan year) upon which retirement benefits and contributions may be based. This maximum is also reviewed and may be adjusted annually. For the 2018 Plan year (from July 1, 2018 to June 30, 2019), the maximum is $275,000.

Designated Faculty

The designated faculty eligible for a 5% UC contribution to the supplemental benefit (on all eligible pay up to the annual IRS maximum) are as follows:

  • Ladder-rank faculty and equivalent titles (Professorial and Equivalent titles, which include Agronomists, Astronomers, Clinical Professor of Dentistry [over 50%] and Supervisor of Physical Ed)
  • Professor in Residence series
  • Professor of Clinical (X) series
  • Acting full, associate and assistant professors
  • Lecturers/Senior Lecturers (full-time) with Security of Employment or Potential Security of Employment (excluding UC Hastings Lecturers/ Senior Lecturers)
  • Adjunct Professor series
  • Health Science Clinical Professor series

Contribution Rates

UCRP/Pension Choice is a defined benefit plan; therefore, your benefit from the pension component is determined by a formula based on age, service and pay (not based on contributions made by you and UC). Employer and employee contribution rates are set periodically by the UC Regents.

The total UC contribution rate to UCRP is currently 14%, which includes approximately 6% toward UC’s unfunded pension liability. Employee contributions and the provisions of Pension Choice and Savings Choice are subject to collective bargaining for represented employees. Please refer to the appropriate collective bargaining agreement, as benefits and other provisions may vary.

Switching from Savings Choice to Pension Choice

UC is requesting IRS approval to offer employees hired on or after July 1, 2016 a one-time future opportunity to change from Savings Choice to Pension Choice. Enrollment in Pension Choice is irrevocable. If UC’s request is approved, it’s important to understand that, if an employee switches from Savings Choice to Pension Choice:

  • The time spent in Savings Choice will count toward vesting in Pension Choice benefits. Service credit toward Pension Choice benefits will begin to accrue at the point the employee switches to Pension Choice.
  • Accumulated balances in the Savings Choice account will remain in the employee’s account until retirement. Distributions are governed by plan rules.
  • The timing of the one-time future opportunity to switch to Pension Choice may depend on job type.