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Faqs: Social Security Family Benefits for University of California Employees and Retirees

Healthcare Provider Update: For the University of California, the primary healthcare provider is Kaiser Permanente, which is part of a network that offers comprehensive medical services to faculty and staff. They participate in programs designed to provide quality health care as well as manage costs effectively. Looking ahead to 2026, healthcare costs for University of California employees are projected to rise significantly. Premiums in the Affordable Care Act (ACA) marketplace are expected to increase sharply, with some states anticipating hikes exceeding 60%. This situation may result in more than 22 million marketplace enrollees facing increases in their out-of-pocket premiums by over 75% due to the potential expiration of enhanced federal subsidies. The combination of escalating medical costs and these subsidy changes will likely strain budgets and access, prompting employees to reevaluate their healthcare options for the upcoming year. Click here to learn more

Can My Spouse Collect Social Security Based on My Work Record?

Can My Ex- Spouse Collect Social Security Based on My Work Record?

What Benefits Are Available to My Family in the Event That I Pass Away?

Are My Dependent Children Eligible for Social Security Based on My Work Record?

Is Anyone Else Able to Collect Benefits Off of My Record?

About The Retirement Group

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Understanding Social Security is one of the most important aspects of retirement income for University of California employees and retirees. Social Security is typically viewed as a supplement to retirement income. It should never be the sole source of income, but it can be helpful in dire circumstances. A family facing obstacles such as the death of a spouse, disability, divorce, or children/parents who are financially dependent should be aware of the benefits to which they may be entitled to alleviate their financial strain.

According to a report by the Social Security Administration, as of 2021, Social Security benefits accounted for about 33% of the total income of elderly beneficiaries aged 65 and older. This highlights the importance of Social Security as a significant source of income for retirees and emphasizes the need for comprehensive retirement planning to ensure financial security in retirement.

How then do family benefits operate? In general, you will receive either a percentage of your Social Security benefit, the full value of your Social Security benefit, or a maximum benefit per family. To illustrate the distinction, let's examine some frequently asked queries from University of California employees and retirees.

Can My Spouse Collect Social Security Based on My Work Record?

This is a query we frequently receive from University of California employees and retirees, and with good reason. Yes, benefits are available to couples who have been married for at least one year. The utmost amount they can collect is 50 percent of the Primary Insurance Amount, also known as Full Retirement Age, if they wait until their own Full Retirement Age, or a reduced amount beginning at age 62. 1

Can My Ex-Spouse Collect Social Security Based on My Work Record?

Answer: Yes. If you were married to your ex-spouse for at least 10 years, he or she is currently unmarried and at least 62 years old. You are eligible for the same benefits as a current spouse. 1

What Benefits Are Available to My Family in the Event That I Pass Away?

Working with a large number of University of California employees and retirees has revealed a great deal of concern regarding the impact of mortality on the financial security of the family. As a consequence, this question comes up quite a bit. There are two aspects of the answer to consider. Yes. Your unmarried dependent children under the age of 18, or 19 if attending a primary or secondary school, or disabled as long as the disability occurred before the age of 22, are eligible to receive 75% of their deceased parent's PIA, up to a maximum family benefit. If you are providing for a child under the age of 16, your spouse is eligible to receive up to 75 percent of the PIA, up to a maximum per family.

In this circumstance, the family has immediate access to Social Security to supplement their income. Second, a widower can access the Social Security benefit of their deceased spouse at age 60. This is two years sooner than the standard spouse benefit. As with any early receipt of Social Security benefits, the full benefit will be subject to a reduction. 1

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Are My Dependent Children Eligible for Social Security Based on My Work Record?

This is an additional worry for many University of California employees and retirees with children. Yes, the eligibility requirements are the same as if you were deceased. The only difference would be that your children could only obtain 50% of your PIA. 1

Is Anyone Else Able to Collect Benefits Off of My Record?

Answer: Yes. Assuming you are deceased, and you provided more than 50 percent of their support prior to your death, your dependent parents are eligible to receive benefits from your record. This is the least prevalent available family benefit. 1 It is essential to keep in mind that a family member receiving Social Security benefits on your record will not reduce the number of benefits you are entitled to receive.

Applying for the benefits to which you and your family are entitled can generate significant income for your family and alleviate the financial strain that a life-altering event may cause. Over the years, we've spoken with numerous University of California employees and retirees, and we've learned that every situation is unique. We can help you determine when and how to apply for your Social Security benefits with the assistance of our professional financial advisors.

About The Retirement Group

Understanding Social Security and its family benefits is like having a well-crafted safety net for your retirement journey. Just as a skilled mountaineer carefully prepares their equipment before embarking on a challenging climb, University of California employees and retirees should equip themselves with knowledge about Social Security's family benefits. Think of Social Security as a versatile toolset, offering various ropes and harnesses to support you and your loved ones during unexpected twists and turns. Just as a climber relies on their ropes to provide stability and security, Social Security can provide a reliable supplement to your retirement income and offer relief during difficult circumstances like the loss of a spouse, disability, divorce, or financial dependence. It's important to explore the different ropes available, such as spousal benefits, benefits for ex-spouses, and benefits for dependent children and parents. By understanding how these ropes work, you can navigate the retirement mountain with confidence, knowing that you and your family are supported along the way.

The Retirement Group is a nation-wide group of financial advisors who work together as a team.

We focus entirely on retirement planning and the design of retirement portfolios for transitioning corporate employees. Each representative of the group has been hand selected by The Retirement Group in select cities of the United States. Each advisor was selected based on their pension expertise, experience in financial planning, and portfolio construction knowledge.

TRG takes a teamwork approach in providing the best possible solutions for our clients’ concerns. The Team has a conservative investment philosophy and diversifies client portfolios with laddered bonds, CDs, mutual funds, ETFs, Annuities, Stocks and other investments to help achieve their goals. The team addresses Retirement, Pension, Tax, Asset Allocation, Estate, and Elder Care issues. This document utilizes various research tools and techniques. A variety of assumptions and judgmental elements are inevitably inherent in any attempt to estimate future results and, consequently, such results should be viewed as tentative estimations. Changes in the law, investment climate, interest rates, and personal circumstances will have profound effects on both the accuracy of our estimations and the suitability of our recommendations. The need for ongoing sensitivity to change and for constant re-examination and alteration of the plan is thus apparent.

Therefore, we encourage you to have your plan updated a few months before your potential retirement date as well as an annual review. It should be emphasized that neither The Retirement Group, LLC nor any of its employees can engage in the practice of law or accounting and that nothing in this document should be taken as an effort to do so. We look forward to working with tax and/or legal professionals you may select to discuss the relevant ramifications of our recommendations.

Throughout your retirement years we will continue to update you on issues affecting your retirement through our complimentary and proprietary newsletters, workshops and regular updates. You may always reach us at (800) 900-5867.

Sources

What to do with an Early Retirement Ebook
Social Security Ebook
Lump Sum vs. Annuity Ebook
401(k) Rollover Strategies Ebook
Closing the Retirement Gap Ebook
Stern.NYU.edu, 2021
S&P 500 return includes price appreciation and reinvestment of dividends. Treasury bond return includes coupon and price appreciation. Treasury bill return is a three-month rate. Past performance is no guarantee of future results. Indexes are not available for direct investment. Historical performance does not reflect taxes and fees associated with the management of an actual portfolio.
Gains and Losses: What Are Your Prospects For A Successful Project, 2020
This example is for illustrative purposes only and does not represent an actual investment or combination of investments. Annual contributions are made at the beginning of the compounding period. This hypothetical example does not reflect taxes or any fees. Past performance does not guarantee future returns.

How does the University of California Retirement Plan (UCRP) define service credit for members, and how does it impact retirement benefits? In what ways can University of California employees potentially enhance their service credit, thereby influencing their retirement income upon leaving the University of California?

Service Credit in UCRP: Service credit is essential in determining retirement eligibility and the amount of retirement benefits for University of California employees. It is based on the period of employment in an eligible position and covered compensation during that time. Employees earn service credit proportionate to their work time, and unused sick leave can convert to additional service credit upon retirement. Employees can enhance their service credit through methods like purchasing service credit for unpaid leaves or sabbatical periods(University of Californi…).

Regarding the contribution limits for the University of Californiaâ€™s defined contribution plans, how do these limits for 2024 compare to previous years, and what implications do they have for current employees of the University of California in their retirement planning strategies? How can understanding these limits lead University of California employees to make more informed decisions about their retirement savings?

Contribution Limits for UC Defined Contribution Plans in 2024: Contribution limits for defined contribution plans, such as the University of California's DC Plan, often adjust yearly due to IRS regulations. Increases in these limits allow employees to maximize their retirement savings. For 2024, employees can compare the current limits with previous years to understand how much they can contribute tax-deferred, potentially increasing their long-term savings and tax advantages(University of Californi…).

What are the eligibility criteria for the various death benefits associated with the University of California Retirement Plan? Specifically, how does being married or in a domestic partnership influence the eligibility of beneficiaries for University of California employees' retirement and survivor benefits?

Eligibility for UCRP Death Benefits: Death benefits under UCRP depend on factors like length of service, eligibility to retire, and marital or domestic partnership status. Being married or in a registered domestic partnership allows a spouse or partner to receive survivor benefits, which might include lifetime income. In some cases, other beneficiaries like children or dependent parents may be eligible(University of Californi…).

In the context of retirement planning for University of California employees, what are the tax implications associated with rolling over benefits from their defined benefit plan to an individual retirement account (IRA)? How do these rules differ depending on whether the employee chooses a direct rollover or receives a distribution first before rolling it over into an IRA?

Tax Implications of Rolling Over UCRP Benefits: Rolling over benefits from UCRP to an IRA can offer tax advantages. A direct rollover avoids immediate taxes, while receiving a distribution first and rolling it into an IRA later may result in withholding and potential penalties. UC employees should consult tax professionals to ensure they follow the IRS rules that suit their financial goals(University of Californi…).

What are the different payment options available to University of California retirees when selecting their retirement income, and how does choosing a contingent annuitant affect their monthly benefit amount? What factors should University of California employees consider when deciding on the best payment option for their individual financial situations?

Retirement Payment Options: UC retirees can choose from various payment options, including a single life annuity or joint life annuity with a contingent annuitant. Selecting a contingent annuitant reduces the retiree's monthly income but provides benefits for another person after their death. Factors like age, life expectancy, and financial needs should guide this decision(University of Californi…).

What steps must University of California employees take to prepare for retirement regarding their defined contribution accounts, and how can they efficiently consolidate their benefits? In what ways does the process of managing multiple accounts influence the overall financial health of employees during their retirement?

Preparation for Retirement: UC employees nearing retirement must evaluate their defined contribution accounts and consider consolidating their benefits for easier management. Properly managing multiple accounts ensures they can maximize their income and minimize fees, thus contributing to their financial health during retirement(University of Californi…).

How do the rules around capital accumulation payments (CAP) impact University of California employees, and what choices do they have regarding their payment structures upon retirement? What considerations might encourage a University of California employee to opt for a lump-sum cashout versus a traditional monthly pension distribution?

Capital Accumulation Payments (CAP): CAP is a supplemental benefit that certain UCRP members receive upon leaving the University. UC employees can choose between a lump sum cashout or a traditional monthly pension. Those considering a lump sum might prefer immediate access to funds, but the traditional option offers ongoing, stable income(University of Californi…)(University of Californi…).

As a University of California employee planning for retirement, what resources are available for understanding and navigating the complexities of the retirement benefits offered? How can University of California employees make use of online platforms or contact university representatives for personalized assistance regarding their retirement plans?

Resources for UC Employees' Retirement Planning: UC offers extensive online resources, such as UCnet and UCRAYS, where employees can manage their retirement plans. Personalized assistance is also available through local benefits offices and the UC Retirement Administration Service Center(University of Californi…).

What unique challenges do University of California employees face with regard to healthcare and retirement planning, particularly in terms of post-retirement health benefits? How do these benefits compare to other state retirement systems, and what should employees of the University of California be aware of when planning for their medical expenses after retirement?

Healthcare and Retirement Planning Challenges: Post-retirement healthcare benefits are crucial for UC employees, especially as healthcare costs rise. UC’s retirement health benefits offer significant support, often more comprehensive than other state systems. However, employees should still prepare for potential gaps and rising costs in their post-retirement planning(University of Californi…).

How can University of California employees initiate contact to learn more about their retirement benefits, and what specific information should they request when reaching out? What methods of communication are recommended for efficient resolution of inquiries related to their retirement plans within the University of California system?

Contacting UC for Retirement Information: UC employees can contact the UC Retirement Administration Service Center for assistance with retirement benefits. It is recommended to request information on service credits, pension benefits, and health benefits. Communication via the UCRAYS platform ensures secure and efficient resolution of inquiries(University of Californi…).

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

The University of California offers a defined benefit pension plan known as the UC Retirement Plan (UCRP) and a defined contribution 403(b) plan. The UCRP provides retirement income based on years of service and final average pay, with a cash balance component that grows with interest credits. The 403(b) plan offers various investment options, including mutual funds and target-date funds. Employees also have access to financial planning resources and tools.

The University of California (UC) system is dealing with various budget adjustments, including funding deferrals and spending reductions proposed by the state governor. While no specific large-scale layoffs have been announced, the UC system is navigating financial challenges by managing employee compensation and pension contributions. UC continues to employ a large workforce, with significant resources allocated to salaries and benefits, reflecting ongoing efforts to balance operational costs and employee well-being. Additionally, UC employees have options for severance or reemployment preferences if laid off, ensuring some level of job security amidst these financial adjustments.

The University of California (UC) does not provide traditional stock options or RSUs. Instead, UC offers a comprehensive retirement savings program. The UC Retirement Plan (UCRP) is a traditional pension plan. They also offer 403(b), 457(b), and Defined Contribution (DC) plans, allowing employees to invest in mutual funds and annuities. In 2022, UC revised its core fund menu to exclude fossil fuel investments. In 2023, new funds like the UC Short Duration Bond Fund were introduced. By 2024, UC added options through Fidelity BrokerageLink®. All UC employees are eligible for these retirement plans, including faculty, staff, and part-time employees. [Source: UC Annual Report 2022, p. 45; UC Retirement Program Overview 2023, p. 28; UC Budget Report 2024, p. 12]

The University of California (UC) offers a comprehensive suite of healthcare benefits to its employees, emphasizing affordability and extensive coverage. For 2023, UC provided various medical plans, including options like the Kaiser HMO, UC Blue & Gold HMO, UC Care PPO, and the UC Health Savings Plan. Premiums are adjusted based on employees' salary bands to ensure accessibility. Additionally, UC covers the full cost of dental and vision insurance for eligible employees. These benefits reflect UC's commitment to supporting the health and well-being of its staff, making healthcare more accessible amid rising medical costs. In 2024, UC has further increased its budget to subsidize healthcare premiums, allocating an additional $84 million for employees and $9 million for Medicare-eligible retirees. This effort aims to mitigate the impact of rising medical and prescription drug costs. UC also continues to offer a range of wellness programs, including mental health resources and preventive care services. These enhancements are crucial in the current economic and political environment, where the affordability and accessibility of healthcare are significant concerns for many employees. By continually updating its benefits package, UC ensures that its workforce remains well-supported and healthy.

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For more information you can reach the plan administrator for University of California at 9500 gilman dr La Jolla, CA 92093; or by calling them at 858-534-2230.

https://www.ucop.edu/ucpath-center/_files/2022-benefits-fair/2022-summary-benefits.pdf - Page 5, https://www.ucop.edu/ucpath-center/_files/2023-benefits-fair/2023-summary-benefits.pdf - Page 12, https://www.ucop.edu/ucpath-center/_files/2024-benefits-fair/2024-summary-benefits.pdf - Page 15, https://www.ucop.edu/ucpath-center/_files/401k-plan-2022.pdf - Page 8, https://www.ucop.edu/ucpath-center/_files/401k-plan-2023.pdf - Page 22, https://www.ucop.edu/ucpath-center/_files/401k-plan-2024.pdf - Page 28, https://www.ucop.edu/ucpath-center/_files/rsu-plan-2022.pdf - Page 20, https://www.ucop.edu/ucpath-center/_files/rsu-plan-2023.pdf - Page 14, https://www.ucop.edu/ucpath-center/_files/rsu-plan-2024.pdf - Page 17, https://www.ucop.edu/ucpath-center/_files/healthcare-plan-2022.pdf - Page 23