At their November meeting, The Regents approved new repayment provisions for buyback of UC Retirement Plan (UCRP) service credit for leaves of absence and redeposit of contributions by active employees. They also approved other changes to expand the election period and the amount of leave time that can be purchased.

Repayment Options
When the changes are implemented in late spring, active employees (on UC pay status in an eligible appointment) will have several new options for completing a buyback or redeposit payment including:

• A trustee-to-trustee transfer of funds to UCRP from the UC plans—DC Plan, the 403(b) Plan or the 457(b) Plan.
• Direct rollover from a non-UC eligible plan, such as a tax-qualified 401(a), 401(k), 403(b) or governmental 457(b) plan, provided the employee would be eligible to take a distribution under the provisions of the source plan. (For example, a 403(b) participant generally cannot take a distribution until separation from service by the employer sponsoring the plan or reaching age 59 ½.)
• No taxes or penalties would apply to the UCRP buyback made with a trustee-to-trustee transfer or direct rollover.
• Expanded opportunities for after-tax lump sum payment.

Other Changes
The Regents also approved other changes that will expand buyback opportunities for employees. These expanded opportunities include:

• Ability to buy back more than two years of service credit. Previously, buybacks for leaves beginning on or after July 1, 1997 were limited to the purchase of no more than two years of service credit. Member cost of the buyback for the first two years of the leave would continue to be the normal plan cost. However, member cost to purchase service credit beyond the first two years would be based on individual actuarial cost.
• Ability to elect a buyback outside a three-year period. A buyback election within three years of returning from leave continues to be based on the Plan normal cost, and a redeposit election made within three years of reemployment continues to be based on the refunded amount plus interest. Leave buyback and redeposit elections made more than three years after returning from leave or reemployment will be permitted and will be based on an individual actuarial cost calculation.
• Ability to purchase part of a leave period. Currently employees who wish to buyback service credit for a leave must purchase the full leave period, up to two years. The changes allow purchase of part of a leave in full-year increments and purchase of more than two years of service.
• Flexible repayment period. Employees not choosing to purchase with a lump sum payment may pay for the buyback through pre-tax salary reduction over a period less than the full leave period and up to a maximum period of five years. For leaves of more than one year, employees must buy back service credit in full-year increments.

Implementation of the changes is planned for late spring. Watch for more information on At Your Service.