Summary Pla N D Escriptio N
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university of california
Tax-Deferred
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cripti
403(b) Plan
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summar
may 2008
Addresses, Information
iF YoU move
and Resources
it is your responsibility to notify the plan administrator
of your new mailing address. uc uses the address on
Listed below are telephone numbers, website and
file as the address of record for you and your beneficia-
correspondence addresses for some of the resources UC
ries. failure to keep your address current could reduce
employees routinely use.
your benefits. the plan administrator may charge the
costs of locating missing participants against the
accumulations of separated participants with incorrect
RetiRement SavingS PRogRam
addresses.
RecoRdkeePeR
if you’re an active employee (currently working
Fidelity Retirement Services
at Uc):
Fidelity Retirement Services website: netBenefits.com
you can change your address online at at your service
Telephone: 1-866-682-7787
online, a secure website where you can update
personal information maintained in uc’s payroll and
Plan adminiStRatoR
benefits databases. to record an address change, go to
at your service and select “sign in to my accounts.”
UC Human Resources and Benefits
enter your username or social security number
UC HR/Benefits website: atyourservice.ucop.edu
and your uc password; then select “my contact
information.”
Written correspondence should be sent to:
UC HR/Benefits
if you’re no longer working for Uc or are
P.O. Box 24570
retired:
Oakland, CA 94623-1570
notify fidelity retirement services by calling the
retirement services center at 1-866-682-7787. in
addition, you may want to notify uc Hr/Benefits of an
inveStment oveRSight
address change by calling the uc customer service
University of California Treasurer’s Office
center. or, if you have internet access, select “forms
Treasurer’s Office website: ucop.edu/treasurer
and publications” on at your service and print and
complete form uBen 131 (UC Benefits Address Change
Written correspondence should be sent to:
Notice) and mail it to uc Hr/Benefits.
Office of the Treasurer of The Regents
1111 Broadway, Suite 1400
Oakland, CA 94607
2
403(b)
The Tax-Deferred 403(b) Plan is a valuable component
Fidelity Retirement Services provides recordkeeping
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of the UC Retirement Savings Program offered to the
and account services for the 403(b) Plan. Visit the
University community. This Summary Plan Description
Fidelity Retirement Services website (netBenefits.com)
explains the provisions, policies and rules that govern
or call 1-866-682-7787 for information about:
UC’s Tax-Deferred 403(b) Plan (the 403(b) Plan).
Beneficiaries
Your future financial security depends in part on
Distributions
decisions you make about your participation in the
403(b) Plan and your understanding of the pivotal role
Enrollment
you play. Therefore, we encourage you to read this
Exchanges/Transfers
booklet carefully and to keep it with your important
papers for later reference.
Investment Options
Please note—make sure that UC always has your
403(b) Plan Loans
current address. That way, we’re able to keep you
Personal Account Information
informed about the status of your present and future
retirement savings benefits and to provide you with
Plan Performance
information that may help you with decisions that
Rollovers
could be crucial to your future financial security. See
inside front cover for information about how to report a
participants who leave uc employment with a 403(b)
change of address.
plan balance of less than $2,000 are not eligible to
The University of California Tax-Deferred 403(b) Plan
remain in the 403(b) plan. if your balance was under
document contains details of the provisions of the Plan.
$2,000 and you left uc employment before
If a conflict exists between this Summary Plan Descrip-
July 1, 2005, call the uc customer service center at
tion and the Plan document, the Plan document
1-800-888-8267 for information. if you left uc
governs. The Associate Vice President, Human
employment on or after July 1, 2005, contact fidelity
Resources and Benefits (UC HR/Benefits), serves as the
retirement services. for more information, see page 12.
Plan Administrator and has the authority to interpret
disputed provisions.
ontents
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403(b) Plan
Table of Contents
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Introduction .............................................................3
Distributions to Beneficiaries...................................9
Eligibity ...................................................................3
Additional 403(b) Plan Information .........................9
403(b)
Contributions ...........................................................3
Investment Options ............................................................ 9
Leaves of Absence ............................................................. 3
Rollovers:
Termination of Employment ............................................. 4
Into the Plan ................................................................ 10
Reappointment ................................................................... 4
From the Plan .............................................................. 10
Maximum Annual Contribution Limits ............................. 4
Account Activity ............................................................... 10
Special Catch-up Provision .......................................... 4
Claims Procedures.............................................................11
Excess Salary Reductions ................................................. 4
Plan Administration and Fees .........................................11
Investment of Contributions ............................................. 5
Plan Changes .................................................................... 12
Designation of Beneficiary ............................................. 12
403(b) Plan Loan Program .......................................5
Assignment of Benefits ................................................... 12
Loan Terms and Borrowing Limits ................................... 5
Qualified Domestic Relations Orders (QDROs) .............. 12
Interest Rates and Administrative Fees .......................... 6
Ineligible Accounts Retained by UC .............................. 12
Repayment .......................................................................... 6
Employee Information Statement ..........................13
Distributions ............................................................7
Current UC Employees ...................................................... 7
Hardship Distributions .................................................. 7
Retirees and Former Employees ...................................... 7
Taxes on Distributions ....................................................... 8
Early Distribution Penalties .............................................. 8
Minimum Required Distributions ..................................... 8
2
i
ntr
oduction
Introduction
Contributions
The 403(b) Plan is a defined contribution plan
Salary deferral contributions to the 403(b) Plan come
described under §403(b) of the Internal Revenue Code
only from income paid through the UC payroll system
(the IRC). Future benefits from the 403(b) Plan will
(or the payroll systems of Lawrence Berkeley National
reflect the amount of a participant’s voluntary salary
Laboratory or Hastings College of the Law). Employees
deferral contributions plus earnings. Vesting is
may also roll over money from other employer-spon-
immediate.
sored plans, including the taxable portion of a
distribution from the University of California Retirement
Employees who want to participate in the 403(b) Plan
Plan (UCRP; see “Rollovers: Into the Plan”).
designate a portion of their gross salary to be contrib-
uted on a pretax basis, thus reducing the participant’s
Contributions to the 403(b) Plan are reported annually
taxable income. Taxes on contributions and any
on employees’ W-2 forms, but are not included in
earnings are deferred (that is, postponed) until the
income subject to taxation.
participant withdraws the money.
403(b) Plan salary deferral contributions are deducted
The designated Plan Administrator of the 403(b) Plan
from gross salary (after any other pretax deductions for
is the Associate Vice President, Human Resources and
medical plan premiums, dependent care expenses, or
Benefits (AVP—HR/B). The AVP —HR/B has delegated
certain health care expenses), and income taxes are
recordkeeping duties to Fidelity Retirement Services.
calculated on remaining pay. Although 403(b) Plan
The relevant contact information is on the inside front
salary deferral contributions reduce taxable income,
cover. The Plan Administrator administers the 403(b)
they do not reduce any other salary-related University
Plan for the sole benefit of Plan participants and their
benefits such as vacation or sick leave, life or disability
beneficiaries. Participation is voluntary and should be
insurance benefits, or benefits payable from UCRP.
based on the participant’s financial objectives and re-
Upon enrollment, participants choose the flat dollar
sources. Individual investment strategies should reflect
amount or percentage of salary that they will contri-
the participant’s personal savings goals and tolerance
bute through payroll (generally monthly or biweekly)
for financial risk. Participants may also want to con-
up to their maximum annual contribution amount.
sult a tax advisor or financial planner before enrolling.
Under the percentage method, contributions change
UC, The Regents, the Treasurer, UC HR/Benefits and
proportionately as the participant’s salary changes.
Fidelity Retirement Services are not liable for any loss
that may result from participants’ investment decisions.
If a participant transfers employment from one UC
This Summary Plan Description summarizes the Plan
location to another UC location, the salary deferral
document as revised effective January 1, 2008.
election will stop automatically. The participant must
re-enroll at the new location to continue contributions.
Eligibility
leaveS oF abSence
Contributions stop during a leave without pay and
All employees of UC and Hastings College of the
resume automatically at the same rate upon return to
Law—except students who normally work fewer than
pay status unless the participant cancels them.
20 hours per week—are eligible to participate in the
403(b) Plan. An employee begins participation when
For sabbatical leaves or administrative leaves with pay
contributions are made to the 403(b) Plan on the
during which employees earn less than 100 percent of
employee’s behalf. An employee or former employee
regular compensation, contributions continue in the
continues participation until all funds held on his or
same amount or percentage (see “Contributions”) as
her behalf are distributed.
elected before the leave unless the participant makes a
change. Because contributions remain the same while
compensation decreases, it is important for participants
to review their contribution amount before going on a
paid leave.
3
Special rules may allow participants on military leave
Special Catch-up Provision
to “make up” contributions that would have been
A special catch-up provision may allow participants
ontributions
credited to their accounts during the military leave.
c
to make additional contributions if, as of the preceding
Local Benefits Offices can provide more information.
calendar year:
During paid vacation or sick leave, contributions
the participant has 15 or more full years of UC
continue in the same amount.
employment, and
the participant’s cumulative 403(b) Plan contribu-
teRmination oF emPloYment
tions (not including earnings) total less than
If a participant leaves UC employment, contributions
$5,000 times years of UC employment.
stop automatically. The payment options available for a
participant’s accumulations are described in “Distribu-
The special catch-up provision allows additional
tions, Retirees and Former Employees” (see page 7).
contributions up to a maximum of $3,000 per year.
Total cumulative special catch-up contributions under
this provision are limited to $15,000. For participants
ReaPPointment
age 50 and older, the first $3,000 of any salary defer-
If a participant leaves UC employment or retires and is
rals contributed each year in excess of the under-age
later rehired into an eligible position, the participant
50 limit is counted as a special catch-up contribution
may begin contributing to the Plan again.
until they are no longer eligible to make these contri-
butions. Participants who want to maximize 403(b)
maximUm annUal contRibUtion
Plan contributions should take advantage of the special
limitS
catch-up provision as soon as possible after completing
15 years of service.
The IRC limits the amount participants may contribute
annually to tax-advantaged retirement plans and
imposes substantial penalties for violating contribution
exceSS SalaRY RedUctionS
limits (see “Excess Salary Reductions”).
UC payroll systems monitor 403(b) Plan contributions,
and a participant’s contributions will stop automatically
For 2008, the 403(b) Plan contribution limits on salary
if they reach the limit before the end of the year. As a
deferral contributions are as follows:
result, there is little chance of overcontributing. In
Regular contribution limit
$15,5001
limited circumstances, however, excess salary reduc-
tions may be made —if, for example, a participant works
Participants who are age 50 or older any
at more than one UC location during the year or
time during the year
$20,5001
contributes to a tax-advantaged plan with another
To contribute the maximum amount, participants
employer.
should check the limits and adjust their contributions
for each calendar year accordingly.
if participants overcontribute because they work at
more than one uc location, the excess will normally be
adjusted gross salary for any year is a participant’s
identified and, in most cases, returned (with any
gross university salary (including any shift differential,
earnings) before the end of the year in which it occurs.
summer or equivalent term salary, health science faculty
if participants think they have overcontributed but have
income over the base professorial salary, stipends and
not been contacted, or if they contribute to a tax-
overtime), minus any required pretax contributions to
advantaged plan with another employer during the year,
other retirement plans (for example, the university of
they should call fidelity retirement services before the
california retirement plan contributions that currently
end of the year (or by march 1 of the following year) to
are redirected to the uc defined contribution plan or
request a refund.
calpers) and any pretax payments for ucrp (to
establish, reestablish or convert prior periods of
service credit or to eliminate the noncontributory
The IRC requires that excess salary reductions in any
offset).
calendar year be refunded to the participant by
April 15 of the following year to avoid tax penalties. If
the excess is refunded by April 15, the excess is treated
as ordinary income for the year in which the salary
1 or 100 percent of adjusted gross salary, if less
reductions were made. The refund will also reflect any
4
403(b)
earnings (or loss) generated by the excess salary
p
reductions during that year. The earnings must be
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403(b) Plan
reported on tax returns for the year in which the
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oan
refund is paid. For example, if a participant receives a
Loan Program
p
refund of 2006 excess contributions in 2006, all
r
ogram
amounts should be reported on tax returns for 2006. If
403(b) Plan Loan Program policies and guidelines
the participant receives the refund in 2007, however,
conform to applicable IRC provisions and are subject to
the excess contributions should be reported on 2006
termination or change by the Plan Administrator and
tax returns and any earnings on tax returns for 2007.
various governing authorities without prior notice.
Refunds of excess contributions and earnings are not
Participants are eligible to borrow their 403(b) Plan
eligible for rollover, nor are they subject to the penalty
accumulations if they are active UC employees with at
taxes on early distributions (see “Early Distribution
least $1,000 in the Plan.
Penalties” on page 8).
403(b) Plan loans are secured by a promissory note
If an excess contribution is not refunded by April 15,
between the participant and the University. As each
the excess amount must remain in the Plan. The
repayment is credited back to the account, earnings
participant must still report the excess as ordinary
accrue to the participant’s accumulations.
income for the year in which the contributions were
Important note—the decision to participate in the 403(b)
made. In addition, the excess amount will again be
Plan represents a conscious commitment to save for
taxable as ordinary income in the year in which the
retirement years, and participants should borrow from
participant receives a distribution that includes these
the 403(b) Plan only if it is absolutely necessary.
funds. In other words, excess contributions that are not
Although participants are not penalized if they take a
refunded by the April 15 deadline are taxed twice. If
403(b) Plan loan, they do risk the loss of earning
the participant is under age 59½ when the distribution
potential.
occurs, the excess may be subject to the early
distribution penalty as well.
loan teRmS and boRRowing
If, during a year, contributions for the participant are
limitS
made to another plan over which the participant has
Loans are generally granted for a term of five years
control, or a participant makes salary deferral con-
or less (general-purpose loans). Loans taken to pur-
tribuitons to another plan (other than a 457(b)), the
chase a principal residence can extend for a term of up
participant should consult a tax advisor on the
to 15 years (principal-residence loans). Before taking a
applicable limitations on contributions.
loan from the 403(b) Plan to purchase a principal
residence, participants should consult a tax advisor.²
inveStment oF contRibUtionS
Participants choose the investment options in which
they want to invest their contributions. The “Invest-
ment Options” are explained on page 9.
Subject to payroll deadlines, participants may start,
stop or change the amount of their contributions to the
Plan at any time on the Fidelity Retirement Services
website. They also may redirect future 403(b) Plan
contributions to one or more of the investment options
and/or exchange (transfer) accumulations in the Plan
among the investment options at any time. Direct
transfers between certain investment options may be
prohibited. See the Fidelity Retirement Services
website (netBenefits.com) for more information.
² Interest on 403(b) Plan loans is not deductible for income tax
purposes; therefore, a conventional home mortgage loan may be
more advantageous for participants purchasing a principal
residence.
5
Depending on the combined Retirement Savings
p
r
ogram
60 months—or up to 180 months (15 years) if the loan
Program (Defined Contribution Plan, 403(b) Plan, and
is used to buy a principal residence.
457(b) Deferred Compensation Plan) balance, the
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oan
If a participant wants to prepay part or all of the
participant may borrow from $1,000 to $50,000 as
outstanding loan balance, there are no prepayment
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follows:
penalties.
If Retirement Savings
403(b)
Participants with a 403(b) Plan loan who retire, leave
Program Balance is:
Loan Limit is:
UC employment, go on approved leave without pay, go
$1,000 to $20,000
$10,000, or 100% of 403(b)
on furlough or temporary layoff, or otherwise have a
Plan balance, if less than
change in pay status that affects their payroll deduction
$10,000 (minus any current
loan payments must arrange for one of the following
outstanding loan balance).
options with Fidelity Retirement Services within 90
days of their last day on pay status:
$20,000 & over
$50,000³, 50% of combined
Program balance, or 100% of
make monthly payments,
403(b) Plan balance, which-
make full payment in advance for the period off
ever is less (minus any current
pay status (not applicable to retirees), or
outstanding loan balance).
repay the outstanding loan amount in full.
Participants may have one general-purpose loan and
one principal-residence loan outstanding at any given
For employees returning from approved leave without
time; they may take one general-purpose loan and one
pay, Fidelity Retirement Services will automatically
principal-residence loan during any 12-month period.
reamortize the outstanding loan balance, including any
payments missed during the leave, which may increase
inteReSt RateS and
the amount of the monthly payment. Note: the total
number of payments cannot exceed the term maximum
adminiStRative FeeS
(60 months for general purpose loans, 150 months for
Interest rates for the Loan Program are determined
principal residence loans).
quarterly, based on the prime rate plus 1 percent. The
interest rate is fixed when the loan is granted and
If the loan defaults, the outstanding principal will be
remains the same throughout the loan term.
treated as a taxable distribution.
For loans processed on and after July 1, 2005, a
Please note: Fidelity Retirement Services cannot accept
nonrefundable initiation fee of $35 will be deducted
personal checks. Payments must be made by electronic
from the Plan balance at the end of the quarter in
funds transfer or by certified check.
which the loan is taken. A $15 annual maintenance fee
If a participant dies before repaying a loan in full and
is deducted ($3.75 per quarter) for the life of the loan.
the outstanding loan principal is not paid within
90 days of the participant’s death, any outstanding
RePaYment
principal will be treated as a taxable distribution.
Participants generally repay their loans through auto-
Generally, for any circumstance in which either a loan
matic after-tax payroll deduction. Monthly payments
payment or outstanding balance is not repaid when it
of principal and interest are credited proportionately
is due or within 90 days, the loan will be considered in
among the investment options the participant has
default. If the default is not resolved within the 90-day
elected for future contributions. The minimum monthly
period, the loan will be cancelled and any outstanding
payment is $50, and the minimum repayment term
principal will be treated as a taxable distribution from
is 12 months. The maximum repayment term is
the 403(b) Plan.
Borrowers who go on military leave may elect to
suspend loan payments, arrange to continue monthly
³ $50,000 is the maximum amount of principal that a participant
payments (which may involve an interest rate adjust-
may borrow or have outstanding during any 12-month period.
Further, the total amount of all outstanding 403(b) Plan loans
ment), prepay their loan, or pay off the loan. These
within a 12-month period will affect the maximum amount that a
options must be elected before the military leave is
participant may borrow during that period, even if the participant
effective. Contact Fidelity Retirement Services for more
has paid off all amounts owed. The $50,000 maximum is reduced
by the total of any 403(b) loan balances outstanding during the
information.
preceding 12 months.
6
d
istributions
Distributions of outstanding loan principal will be
loss or damage as a result of a natural disaster
subject to ordinary income taxes and may also be
(for example, earthquake, flood, fire, etc.); or
subject to federal and state penalty taxes on early
other circumstances determined by the Internal
distributions (before age 59½). Fidelity Retirement
Revenue Service.
Services will issue a Form 1099R reporting the amount
of the distribution. Taxes and penalties, if applicable,
Participants who request a hardship distribution that
should be reported when the participant files tax
exceeds $10,000 or who make multiple hardship
returns. A participant will not be able to take addition-
distribution requests within a 12-month period must
al loans from the 403(b) Plan while a loan is in default.
provide proof of hardship to Fidelity Retirement
Services. Fidelity Retirement Services and the IRS rules
may also require proof of hardship for certain other
Distributions
hardship distribution requests.
Hardship distributions will include only the
Distribution rules vary depending on the participant’s
participant’s 403(b) Plan contributions. (Exception—
employment status.
contributions rolled over into the 403(b) Plan from a
former employer plan may also be included if
cURRent Uc emPloYeeS
necessary to satisfy the request.) Any earnings on the
contributions must remain in the Plan.
The IRC restricts 403(b) Plan distributions to current
employees. In general, an employee may not take a
A hardship distribution is generally taxed as ordinary
distribution of plan accumulations, unless the
income in the year in which it is issued. In accordance
employee:
with IRS regulations, Fidelity Retirement Services will
withhold 10 percent for federal taxes and 1 percent for
has attained age 59½, or
California state taxes (unless the participant elects no
experienced a hardship as described below.
withholding).
Hardship Distributions
There are specific federal tax-withholding rules that
apply to all distributions from retirement and savings
Employees may be able to take a hardship distribution
plans (see “Taxes on Distributions” on page 8).
on account of an immediate and heavy financial need.
To be eligible for a hardship distribution, an employee
must have exhausted all other financial resources—
RetiReeS and FoRmeR emPloYeeS
including a loan from the 403(b) Plan or any other
In general, participants cannot request a distribution
lending program maintained by UC Retirement Savings
until 31 days after their employment ends. However,
Program, and a distribution of any money in the DC
the 31-day period is waived for participants who are
Plan After-Tax Account. After receiving a hardship
age 59½ or older.
distribution, the employee may not make voluntary
contributions to the 403(b) Plan, the 457(b) Plan, or the
Participants who leave UC employment or retire have
DC Plan for six months. The employee must also certify
the following options for money in the 403(b) Plan:
that the distribution is being taken for at least one of
Leave the money in the Plan if the Plan balance
the following reasons:
totals at least $2,000, subject to minimum
eligible medical expenses;
required distribution rules. Although participants
may no longer contribute, they may transfer funds
the purchase of a principal residence
among the investment options, subject to the
(excluding mortgage payments);
transfer/exchange rules, and roll over money into
tuition payments and/or room and board for the
the Plan;
next 12 months of post-secondary education for
Take a full or partial distribution (payable to the
the employee, his/her spouse or dependents;
participant or directly rolled over to a traditional
payments necessary to prevent foreclosure on
IRA, a Roth IRA, or employer-sponsored plan); see
the mortgage of, or eviction from, a principal
page 8 for information on early distributions.
residence;
Arrange for systematic withdrawals. This option
funeral expenses for a family member;
enables the participant to receive regular, peri-
odic distributions without having to make a
specific request for each one; or
7
Purchase a commercial annuity. Commercial
eaRlY diStRibUtion PenaltieS
annuities provide periodic payments in a fixed
istributions
In addition to being taxed as ordinary income,
amount for a specific period of time. Annuities
d
distributions taken before age 59½ (early distributions)
may be purchased though UC’s group insurance
may be subject to nondeductible federal and state
contract with a California-licensed third party
penalty taxes—currently a 10 percent federal tax and a
insurance carrier. Neither UC HR/Benefits, the
2.5 percent California state tax, unless:
Regents, nor the University has any further
fiduciary obligation to participants who use their
the distribution is made after the participant
403(b) Plan funds to purchase an annuity product
leaves UC employment and in or after the year
from any third-party insurance carrier or other
the participant reaches age 55,
such vendor.
the participant is permanently disabled or dies,
all distributions are subject to fidelity retirement
the participant receives a series of substantially
services and payroll deadlines. no distributions can be
equal distributions over his/her life/life expec-
made until all payroll activity is complete, which can
tancy (or his/her and beneficiary’s lives/life
take from 30 to 60 days.
expectancies),
the distribution is used for deductible medical
For distributions made on and after January 1, 2006,
expenses in excess of 7.5 percent of the
the following Plan rules apply to distributions of small
participant’s adjusted gross income,
accounts after the participant has terminated UC
the distribution is paid to an alternate payee
employment:
under a QDRO,
If the value of the participant’s accumulations is less
the distribution is made on account of certain tax
than $2,000, but more than $1,000, and the partici-
levies, or
pant fails to provide distribution directions, the
participant’s accumulations will be rolled over to an
the distribution is made on account of other
IRA custodian designated by the Plan Administrator in
exceptions defined by the IRS.
an account maintained for the participant.
Early distribution penalties are not assessed when a
If the value of the participant’s accumulations is $1,000
distribution is paid. Participants who are subject to the
or less, and the participant fails to provide distribution
penalties are responsible for reporting them to the IRS
directions, the participant’s accumulations shall be
when they file their income tax returns.
paid directly to the participant at his or her address of
record.
minimUm ReqUiRed diStRibUtionS
Participants must begin receiving minimum distribu-
taxeS on diStRibUtionS
tions from the Plan by April 1 of the calendar year
A distribution from the 403(b) Plan is generally taxed
following the later of:
as ordinary income in the year it is issued. Note,
the year in which they reach age 70½, or
however, that there are specific federal tax-withhold-
ing rules that apply to all distributions from retirement
the year in which they leave UC employment.
savings and investment plans. For more information
Participants who do not receive minimum distributions
about the tax treatment of Plan distributions, read the
by the required dates, or who receive less than the
special tax notice provided by Fidelity Retirement
minimum amount the law requires, must pay a
Services before requesting a distribution. The tax rules
nondeductible 50 percent excise tax on the difference
are quite complex; for these reasons, participants
between the amount that should have been received
considering a distribution from the Plan are strongly
and the amount received.
encouraged to consult a tax advisor.
Minimum required distributions are not eligible for
Participants who choose to take a distribution are
rollover.
responsible for satisfying the distribution rules and
for any tax consequences.
Minimum required distributions are calculated in
accordance with U.S. Treasury regulations.
Distributions to participants are reported annually on
IRS Form 1099R, which are sent in January following
the calendar year in which the distribution was issued.
8
a
d
ditional 403(b)
registration of a same-sex union, other than
Distributions to
marriage, validly formed in another jurisdiction,
Beneficiaries
that is substantially equivalent to a California
domestic partnership; or
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Participants can and should name one or more benefi-
filing of a UC Declaration of Domestic Partnership
form and supporting documentation with the
i
ciary. A beneficiary may be an individual, trust, estate,
nf
ormation
charity, or corporation. When a participant dies, the
UCRP administration.
named beneficiary(ies) should contact Fidelity Retire-
If a member dies before filing a UC Declaration of
ment Services regarding available options. One of the
Domestic Partnership, only documents from the first
options a beneficiary has is to leave the money in the
two methods may be used to establish a domestic
Plan, subject to the minimum required distribution rules.
partnership.
Note that this option applies only if the individual
beneficiary’s share of the deceased participant’s Plan
balance totals at least $2,000. If the named beneficiary
Additional 403(b)
is a trust, estate, charity, or corporation, the Plan
balance must be distributed within nine months of the
Plan Information
date of the participant’s death.
A deceased participant’s beneficiary (the participant’s
beneficiary) may also designate a beneficiary (benefi-
inveStment oPtionS
ciary’s beneficiary) to receive the balance in the
Plan participants have several options for building
deceased participant’s account if the participant’s
individual investment portfolios to achieve their
beneficiary dies before taking a total distribution. The
retirement savings goals. Currently, the Treasurer of
beneficiary’s beneficiary must decide how they want
the Regents of the University of California selects and
money to be distributed within nine months of the
monitors a group of Core Funds based on criteria
death of the participant’s beneficiary.
established by the Regents. The Core Funds include
the UC Funds, which are investment options managed
If no beneficiary has been named, or if the beneficiary
by the Treasurer’s Office or by investment managers
dies before the participant, any amount remaining will
appointed by the Treasurer’s Office, as well as mutual
be distributed to the participant’s survivors in the
funds. The Core Funds provide participants with a
following order of succession:
diverse menu of the major asset classes to which
surviving legal spouse or surviving domestic
participants may direct their contributions.
partner; or, if none,
In addition, Fidelity Investments mutual funds and
surviving children, natural or adopted, on an
Calvert socially responsible mutual funds are available
equal-share basis (children of a deceased child
for those participants willing to assume additional
share their parent’s benefit); or, if none,
responsibility for monitoring their individual fund
choices. These funds are part of fund families previ-
surviving parents on an equal-share basis; or, if
ously authorized by The Regents as plan investment
none,
options and have been retained in the 403(b) Plan as
brothers and sisters on an equal-share basis; or,
an accommodation to participants. The Treasurer’s
if none,
Office does not monitor individual fund performance
and makes no qualitative assessment as to any invest-
the participant’s estate.
ment fund that is not part of the Core Funds.
Procedures established for the University of California
Participants may also invest in mutual funds that are
Retirement Plan (UCRP) are used to determine whether
not included in the Core Funds and are not part of the
a domestic partner is included in the order of succes-
Fidelity or Calvert fund families by opening a brokerage
sion above. Generally, the UCRP procedures require
window account. To open a brokerage window
that an individual must be designated as a UCRP
account, participants must agree to the terms and
member’s domestic partner by one of three possible
conditions that govern the account, including acknowl-
methods:
edgement of the risks involved and the special fees
registration of the domestic partnership with
that may apply.
California’s Secretary of State;
9
Information about investment objectives, risks, changes
plan). As long as the check for the distribution is payable
ormation
and expenses of all options is available, free of charge,
directly to the plan, no taxes should be withheld and the
i
nf
from Fidelity Retirement Services.
funds will retain tax-deferred status. If made payable to
p
lan
the participant, taxable distributions are subject to
RolloveRS: into the Plan
mandatory 20 percent federal tax withholding.
Participants may move eligible retirement funds from a
Participants may also roll over an eligible 403(b) Plan
previous employer plan or an IRA to the 403(b) Plan
distribution consisting of pretax funds that has been
via a rollover. The 403(b) Plan accepts rollovers of
paid to them, as long as the rollover to the IRA or new
d
ditional 403(b)
pre-tax distributions from:
a
plan occurs within 60 days of receipt of the distribu-
tion. A participant who wants to roll over 100 percent
other employer-sponsored plans, including lump
of the distribution must replace, from personal savings
sum cashouts and CAP distributions from the UC
or other sources, an amount equal to the taxes that
Retirement Plan, 401(a), 401(k), 403(b) and
were withheld when the distribution was issued. Any
governmental 457(b) Plans,
amount not rolled over will be taxed as ordinary
traditional IRAs.
income for the year in which the distribution was
issued. It may also be subject to the early distribution
The Plan also accepts direct rollovers of after-tax
penalties.
amounts from other 403(b) plans, 401(a) plans
(including UCRP), and 401(k) plans.
403(b) Plan distributions that are not eligible for
rollover include:
To roll over money directly from another employer-
sponsored plan to UC’s 403(b) Plan, the participant
minimum required distributions,
must arrange to have the plan’s custodian or plan
refunds of excess contributions (plus earnings),
administrator write a check for the distribution,
payable to “Fidelity Investments Institutional Opera-
systematic withdrawals, and
tions Company, Inc. (FIIOC).” As long as the check is
hardship distributions.
payable directly to FIIOC (not to the participant), no
taxes should be withheld from the distribution, and the
Distributions made to non-spouse beneficiaries are
pretax funds will retain their tax-deferred status.
eligible only for a direct rollover and only to an IRA.
Employees who are eligible to participate in the 403(b)
For more information about the tax treatment of
Plan may execute a rollover (and become Plan partici-
rollovers, read the special tax notice available from
pants) even if they have not yet begun contributing to
Fidelity Retirement Services.
the Plan through payroll deductions.
Former employees who did not participate in the
accoUnt activitY
403(b) Plan are not eligible to roll over funds into the
To help participants better understand the Plan’s
Plan, except for eligible distributions from UCRP of
benefits and effectively manage their accounts, Fidelity
$2,000 or more.
Retirement Services, on behalf of UC HR/Benefits,
provides personalized account information via two
If a participant takes a distribution from a former
electronic sources.
employer plan, including UCRP, and the check is
payable to the participant, he/she can also roll over the
Participants who have internet access can find
taxable portion of the money into the 403(b) Plan, as
current, comprehensive information about their
long as the rollover is made within 60 days after
accounts and make certain online Plan
receiving the distribution. To roll over 100 percent of
transactions by visiting Fidelity Retirement
the taxable portion of the distribution, the participant
Services website (netBenefits.com).
must replace, from personal savings or other sources,
Participants can retrieve personal financial
an amount equal to the taxes that were withheld when
information about their accounts and make
the distribution was issued.
transactions on Fidelity Retirement Services
toll-free telephone line (1-866-682-7787).
RolloveRS: FRom the Plan
Annual reports containing audited financial statements
All 403(b) Plan distributions except those listed below
are available on At Your Service or from the UC
are eligible for direct rollover (distribution made payable
Customer Service Center.
to a traditional IRA, a Roth IRA, or another employer
10
a
d
ditional 403(b)
Summary plan descriptions are sent periodically to all
administrator’s denial, the Plan Administrator will
participants and are also available on At Your Service,
notify the claimant. The decision of the Plan Adminis-
the Fidelity Retirement Services website, or from your
trator will be final and conclusive on all persons.
local Benefits Office or the UC Customer Service Center.
If, after exhausting administrative appeal procedures,
p
lan
Participants may obtain a copy of the University of
the claimant still believes that a benefit has been
i
California Tax-Deferred 403(b) Plan document by
improperly paid or denied, the claimant has the right to
nf
ormation
writing to UC HR/Benefits (see inside front cover).
initiate legal proceedings.
Participants should read the complete descriptions of
For service of process, send to The Regents of the
the investment funds and accompanying Plan
University of California, Trustee of the Tax-Deferred
materials before making any investment decisions.
403(b) Plan, c/o Office of the General Counsel,
1111 Franklin Street, 8th Floor, Oakland, CA 94706.
All notices or communications to a participant or a
beneficiary will be effective when sent by first-class
mail or conveyed electronically to the participant’s
Plan adminiStRation and FeeS
address of record. The University and the Regents
The Associate Vice President of HR/Benefits is the Plan
are entitled to rely exclusively upon any notices,
Administrator with responsibility for the day-to-day
communications, or instructions issued in writing or
management and operation of the Plan.
electronically conveyed by UC HR/Benefits that are
believed to be genuine and to have been properly
Investor expenses for the UC Funds are limited to 0.15
executed.
percent (or $1.50 per $1,000 invested) of the Fund’s
average market value per year, assessed on a daily
basis (1/365th per day invested). These expenses are
claimS PRocedUReS
not billed to participants, but are netted against the
If Fidelity Retirement Services is unable to verify a
investment experience of the Fund. These expenses
claimant’s right to a benefit within a short period of
comprise approximately 0.03 percent for investment
time, the claimant will be notified that he or she needs
management, 0.02 percent for investor education, and
to forward a written request to the attention of the UC
0.10 percent for administration (including accounting,
Contract Administrator, UC HR/Benefits, P.O. Box
audit, legal, custodial, and recordkeeping services). The
24570, Oakland, CA 94623-1570 who will review the
total administrative expenses are estimated and actual
claim on behalf of the Plan Administrator. The request
expenses could be lower in some periods. If actual
should include all relevant information. Within 90 days
administrative expenses are less than estimated,
of receipt of the request, the contract administrator will
any residual amount will be returned to the Fund
approve or disapprove the claim. If the claim is denied,
periodically, on a prorated basis, thereby lowering the
the contract administrator will notify the claimant in
effective expense ration for participants. There are no
writing, setting forth the specific reasons for the denial
front-end or deferred sales loads or other marketing
and providing specific references to the plan provisions
expenses.
on which the denial is based. The contract administra-
In addition, any fees paid by participants, including
tor also will describe any additional material or
loan fees and brokerage window account fees, and any
information needed to perfect the claim and provide an
fees that may be awarded for Fidelity Retirement
explanation of the 403(b) Plan’s review procedures.
Services failure to meet certain performance standards,
If the claimant’s request is denied by the contract
will be credited to a plan fee account. At the direction
administrator, the claimant may submit a written
of the Plan Administrator and subject to receipt of
request for an independent review by the Plan
supporting documentation, Fidelity Retirement Services
Administrator within 60 days of receiving the denial.
will apply the plan fee account funds against reason-
The request for an independent review should be
able plan expenses that otherwise would be paid from
forwarded to the Plan Administrator, P.O. Box 24570,
other plan assets. Any basis points that are assessed
Oakland, CA 94623-1570. The request should be
against the market value of the mutual fund invest-
accompanied by all supporting documentation. The
ments in the 403(b) Plan pursuant to revenue sharing
Plan Administrator will make a full review of the
agreements will be credited to an expense credit
request within 60 days unless the circumstances
account and offset against charges for services
require a longer period, but in no event more than 120
provided by Fidelity Retirement Services and its
days. If the Plan Administrator upholds the contract
affiliates. If any amount remains after payment for
11
Fidelity Retirement Services-related services, funds in
creditors, nor can anyone receiving benefits assign
ormation
the expense credit account will be used to reimburse
payments to others. Plan benefits are intended solely
i
nf
the University for reasonable plan expenses previously
for the security and welfare of participants and their
p
lan
paid by the University.
beneficiaries and survivors.
A participant can obtain information on fees charged
There are some exceptions. For example, the IRS may
by a mutual fund investment option by reviewing the
attach retirement benefits to collect unpaid taxes, or a
fund prospectus available on the Fidelity Retirement
court may order certain benefits to be paid for child or
Services website (netBenefits.com).
spousal support.
d
ditional 403(b)
a
Plan changeS
qUaliFied domeStic RelationS
The Plan is subject to change and to independent audit
oRdeRS (qdRoS)
to comply with applicable federal and state statutes,
A court may award Plan assets to the participant’s
IRC regulations and industry standards. Participants
spouse or former spouse or the participant’s depen-
are notified in writing whenever substantive changes
dent. This usually will occur in connection with a
to the Plan occur. Although the Plan is expected to
divorce or legal separation. In such cases, the domestic
continue indefinitely, the Regents reserve the right to
relations order must be approved, or qualified, as being
amend or terminate the Plan at any time.
in compliance with state law and with the Plan.
Both spouses and the court have the right to request
deSignation oF beneFiciaRY
information about the benefits earned by the partici-
Participants should designate a beneficiary to receive
pant during the marital period and how those benefits
their accumulations in the 403(b) Plan in the event of
are derived, as well as information about the options
their death. Participants may name more than one
available to non-participants. To obtain a copy of the
beneficiary and specify the percentage of the Plan
QDRO procedures, contact Fidelity Retirement Services
balance that each beneficiary is to receive. A
(netBenefits.com or 1-866-682-7787).
beneficiary may be a person, trust or organization.
The California legislature recently enacted laws that
For participants who do not name a beneficiary, 403(b)
establish procedures for dividing property in connec-
Plan funds will be distributed to the participant’s
tion with the termination of a state-registered domestic
survivors in the order of succession listed on page 9.
partnership. For more information, call Fidelity
Retirement Services.
Married participants who designate someone other
than their legal spouse as a beneficiary may need to
consider the spouse’s community property rights. For
ineligible accoUntS Retained
residents of a community property state such as
bY Uc
California, a beneficiary designation may be subject to
The 403(b) Plan does not permit a participant whose
challenge if the spouse would consequently receive
accumulations have a value of less than $2,000 to
less than the share of the benefit attributable to
remain in the 403(b) Plan after leaving UC employ-
community property.
ment. In order to facilitate the conversion to the new
If procedural change results in changes to beneficiary
recordkeeper in July 2005, the UC Residual Accounts
designations, the Plan Administrator will notify
group retained administration of ineligible accounts of
affected participants.
participants who terminated UC employment before
July 1, 2005 with small balances as follows:
A will does not supersede a beneficiary designation.
If a participant had accumulations of less than $50 on
It is the participant’s responsibility to keep information
June 30, 2005, and failed to provide timely distribution
on beneficiaries, including addresses, up to date. The
directions or confirm his or her location, the
address of record is binding for all purposes of the
participant’s accumulations were forfeited as of
403(b) Plan.
June 30, 2005. The forfeited amounts will be used to
defray reasonable plan expenses and to restore a
aSSignment oF beneFitS
participant’s previously forfeited accumulations, plus
Generally, 403(b) Plan benefits payable to participants,
interest, if the participant subsequently files a valid
beneficiaries, or survivors cannot be attached by
claim and provides distribution directions.
12
e
mplo
If a participant had accumulations of $50 or more but
University makes any recommendation to participants
y
ee
less than $2,000 on June 30, 2005, and the participant
for building supplemental retirement savings, and the
i
nf
failed to provide timely distribution directions, the
various options available for the investment of contri-
ormation
investment options in the participant’s account were
butions should not be construed in any respect as a
liquidated as of June 30, 2005, and an account was
judgment regarding the prudence or advisability of
established on the participant’s behalf. The aggregated
such investments or as tax advice. Neither the Regents,
s
tatement
assets of all such accounts were then invested in the
the Treasurer, nor the Plan Administrator bear any
UC Savings Fund in order to preserve principal, and a
fiduciary liability for any losses resulting from a partici-
proportionate share allocated to each account. The UC
pant’s investment instructions. The Plan Administrator
Residual Accounts group will maintain such accounts
reserves the right to refuse to implement any invest-
until such time as the participant’s location can be
ment instruction from a participant that violates Plan
confirmed and distribution made. Each account is
rules or IRC provisions.
credited with monthly interest at a fixed rate.
All elections concerning contributions to the 403(b)
Plan are subject to payroll transaction and fund
valuation deadlines.
Employee Information
Neither the University, the Treasurer, the Plan Adminis-
Statement
trator, nor any officer or affiliated officer shall be
responsible in any way for the purpose, propriety or tax
treatment of any contribution or distribution (or any
Participants in defined contribution plans are respon-
other action or nonaction) taken pursuant to the
sible for determining which, if any, investment
direction of a Plan participant, beneficiary, executor or
vehicles best serve their retirement objectives. The
administrator, or a court of competent jurisdiction.
403(b) Plan assets are invested solely in accordance
Although the Regents, the Treasurer, the Plan Adminis-
with the participant’s instructions. The participant
trator, and officers and affiliated officers shall have no
should periodically review whether his/her objectives
responsibility to give effect to a decision from anyone
are being met, and if the objectives have changed,
other than the Plan participant, beneficiary, executor or
the participant should make the appropriate changes.
administrator, they reserve the right to take appropri-
Careful planning with a tax advisor or financial
ate action, including termination and/or disbursement
planner will help to ensure better supplemental
of a participant’s account, to protect the Plan from
retirement savings.
losing its tax-advantaged status for any event that
Neither the Regents, the Treasurer, the Plan Adminis-
violates Plan rules or applicable IRC provisions.
trator, nor any officer or affiliated officer of the
By authority of The Regents, University of California Human Resources and Benefits, located in Oakland, administers all benefit
plans in accordance with applicable plan documents and regulations, custodial agreements, University of California Group
Insurance Regulations, group insurance contracts, and state and federal laws. No person is authorized to provide benefits
information not contained in these source documents, and information not contained in these source documents cannot be
relied upon as having been authorized by The Regents. Source documents are available for inspection upon request
(1-800-888-8267). What is written here does not constitute a guarantee of plan coverage or benefits—particular rules and
eligibility requirements must be met before benefits can be received. The University of California intends to continue the
benefits described here indefinitely; however, the benefits of all employees, retirees, and plan beneficiaries are subject to
change or termination at the time of contract renewal or at any other time by the University or other governing authorities. The
University also reserves the right to determine new premiums, employer contributions and monthly costs at any time. Health
and welfare benefits are not accrued or vested benefit entitlements. UC’s contribution toward the monthly cost of the coverage
is determined by UC and may change or stop altogether, and may be affected by the state of California’s annual budget
appropriation. If you belong to an exclusively represented bargaining unit, some of your benefits may differ from the ones
described here. Contact your Human Resources Office for more information.
In conformance with applicable law and University policy, the University is an affirmative action/equal opportunity employer.
Please send inquiries regarding the University’s affirmative action and equal opportunity policies for staff to Director of
Diversity and Employee Programs, University of California Office of the President, 300 Lakeside Drive, Oakland, CA 94612 and
for faculty to Director of Academic Affirmative Action, University of California Office of the President, 1111 Franklin Street,
Oakland, CA 94607.
Website address: atyourservice.ucop.edu
13
University of California
Human Resources and Benefits
P.O. Box 24570
Oakland, CA 94623-1570
5M
1110 5/08
