UC retirement plan

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UC retirement plan

Postby funflights » Mon Jun 10, 2013 9:27 am


I was wondering if any you have experiance with the UC retirement plan. My wife will soon be eligible as she starts a post-doc at UCLA. Manditory contributions to the DC plan and elective contributions to the 403b/457 plans of 17,500 each. Planning on contributing the max. I am confused about what happens when she leaves UCLA, do the plans need to be rolled over into a new plan? or can they be left in place. Seems like if they need to rolled over it would be better to invest in things that do not need to be sold and re-bought. Tried reading though all the paperwork which is sort of confusing on the issue.

Was wondering if anyone had an experiance with this.

Thanks for your help.

Link to funds: https://ucfocusonyourfuture.mysecureben ... esource/78

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Re: UC retirement plan

Postby Garco » Mon Jun 10, 2013 9:52 am

May I suggest that you try to digest what's online at UCLA, and then follow their suggestion by contacting the folks listed on this page? https://ucfocusonyourfuture.mysecureben ... source/156

I have a brother who's got a pension under the "old" defined contribution plan. But I don't know how things work at UC now.

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Re: UC retirement plan

Postby DVMResident » Mon Jun 10, 2013 10:45 am

Post-docs do not build credit for the pension plan.
They also do not contribute to SS. Instead they have a mandatory 7.5% "safe-harbor" contribution. That's it. It's a great that you are looking at the 403(b)/457 plans.

When your wife is done with the post-doc (<5 years), she will have the option to roll-over the money or leave it with Fidelity.
-The plan is fairly good with a wide array of Index fund and fairly cheap. There is a 0.15% fee on top of all ERs with most index funds in 0.20-0.35% range. So you could leave it there or roll it over to VG for slightly cheap index funds. Not going to break the bank either way you go.

I recommend you look at the post-tax 401(a) option. It might be good for you depending on your tax bracket. I heavily funded this through my residency program.

You won't find this written anywhere:
You're wife maybe offered a "salary" (paid monthly) or a "stipend" (paid quarterly). Stipends are unearned income and can not be directed towards 403(b)/457 plan. Take the salary option if you can.

Good luck.

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Re: UC retirement plan

Postby funflights » Mon Jun 10, 2013 10:59 am

Garco - I did actually read that, but was having some issues figuring out what she qualified for. She was planning on speaking with the UCLA folks about the details, I was just wondering if anyone else had experiance with this.

DVMresident - Thanks, that is very helpful. Ill have to check how she gets paid, I think its monthly. Good to know though.

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Re: UC retirement plan

Postby Retiree2B » Mon Jun 10, 2013 3:18 pm

It's great you're looking into the savings options offered at UC. I recently retired after 20 years with the system (UCSF and UC Davis). I rolled a 403b and 457 over to Vanguard and it was very simple. I personally wouldn't worry about changing investments if you do a rollover later. Vanguard made this very easy and, of course, there were no fees or taxes involved.

Although many Fidelity funds are offered, I would encourage you to check out the UC funds as well. These have very low fees and some include Vanguard and DFA funds which are otherwise not available. For FWIW, I was invested entirely in these funds until retirement.

As was mentioned, be sure to determine if the pension plan is available to a post-doc. There may be some variability depending on department and campus. Although some changes have been made to the plan, it's still an excellent benefit especially if your wife later becomes a UC career employee.

Finally, the workshops offered by Fidelity cover all retirement plan and investment basics. They're basic but good overviews. Best wishes and good luck!

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Re: UC retirement plan

Postby funflights » Fri Jun 14, 2013 9:06 am

Retiree2b -

Thanks for the reply. That is good to know. She is going to check to see what she is eligible for. I think some of it depends on the post doc union rules. The UC funds do look very good, good to know they can be rolled over easily. Probably not going to be working in the uc system in the future although I don't think either of us would have an objection to it

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Re: UC retirement plan

Postby Frengo » Sat Jun 15, 2013 12:05 am

DVMResident wrote: There is a 0.15% fee on top of all ERs with most index funds in 0.20-0.35% range.

Not too sure about that. The UC Core funds, or whatever they call them, have a 0.15% ER. All the other choices have their "native" ER, nothing added on top, afaik.

The OP can probably make do just using the UC funds.

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Re: UC retirement plan

Postby Finkie » Fri Jun 28, 2013 7:11 pm

I am a fairly new UC retiree and what a wild ride we have had in the markets since I retired. I contributed the max to the 403b, and also contributed to the 457. UC's plans are exceptional. Learn all you can all along the way while you're working. My mantra is: Earn all you can, spend less than you make and save more than you spend. Selecting a UC fund or a Fidelity fund at this juncture is very tricky, because all securities, with some notable exceptions (Reits, municipals, Gnma's,MLP's) are moving in lock step and no one knows when interest rates are going to rise. If you and your wife have a very long time horizon, stocks are the best shot at outpacing inflation and earning a dividend on your capital. Dollar cost average a portion of your savings into an index stock fund. Beware of bond funds. Bonds carry risk and many retirees who are sitting in the UC Pathway Income are losing value and capital. I wish that UC's funds would report out daily like other funds and I wish that there was more data on UC fund holdings. There isn't and so we really don't know the daily bond fund holdings and duration of those holdings. As interest rates rise, bond funds are going to get clobbered and this is particularly critical to folks who may need to sell in order to pay essential expenses. Taxes are another concern for those building a retirement portfolio. I wish that I would have set-up a Roth account as a discretionary pool of money to have in retirement. I have more than enough guaranteed streams, but the plan money is tax-deferred and is there any doubt in anyone's mind that we are looking at higher tax rates in the future?

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