Personnel Newsletters

• 10/15/2001    2002 Open Enrollment News (PDF format)
• 01/09/2001    Latest Information Re Casual to Career Conversions (PDF format)
• 12/07/2000    Proposed Program for converting Casual Staff to Career Status
• 10/23/2000    UCLA 2000 Open Enrollment Presentation
• 09/12/2000    Press Release: Proposed Changes for Casual Employees
• 04/24/2000    Press Release: Mailings on New Temporary Employment Policies & UCRP Membership
• 04/05/2000    Financial Fair 2000
• 03/29/2000    Tax Verification Requests
• 03/22/2000    403(b) MAC Procedures for 2000
• 03/15/2000    2000 403(b) MAC Process
• 03/10/2000    CalPERS announces 2000 Application Period for Long-Term Care Program

403(b) MAC Procedures for 2000

Date: March 22, 2000

To: ALL CAMPUS EMPLOYEES

Re: 403(b) Maximum Annual Contribution (MAC) for 2000

The calculation of the 403(b) Maximum Annual Contribution (MAC) limit for 2000 has been completed.

For 2000, the MAC limit is the least of the following:

• Tax Reform Act Limit (TRA) of $10,500;
• Internal Revenue Code (IRC) 415 Limit which is 25% of the employee's adjusted gross income (expected 2000 gross salary minus pretax deductions for the Defined Contribution Plan (DCP), Pretax Transportation Program, and any pretax service credit buyback deductions); or
• Maximum Exclusion Allowance (MEA) which is generally 20% of adjusted gross salary multiplied by years of UC Employment minus any prior contributions of UC sponsored retirement or savings plans and the imputed value of future UCRP benefits.

There are several ways to find out what the MAC limit is for 2000. They are:

1. Employees who were on active payroll as of January 1, 2000, will have the MAC displayed on the EDB (IRET screen). This data was updated on March 20, for 2000. (This option is for employees with EDB access.)

2. A personal MAC statement will be mailed during the week of March 20 to the home address of all employees who contributed to the 403(b) during 1999.

3. A final MAC statement mailing to eligible employees who did not participate during 1999 will be mailed on approximately May 15.

4. Employees may call bencom.fone at 1-800-888-8267; see instructions below under "How to Obtain an Explanation of Data".

5. On the Internet on approximately April 1. Go to www.ucop.edu/bencom; then click on "Savings & Investment Plans", click on "Continue" at bottom of screen, enter SS# & PIN (employees who have lost or forgotten their PIN can reset it on the Internet by going to https://ucfy.ucop.edu), click on "Investment Plans", and finally click on "403(b)Plan".

Employees hired or rehired on or after February 1, 2000 will display "NOT CALCD" on EDB in the 403(b) limit field (IRET screen). These employees should contact Benefits at extension 40830 to request a New Hire MAC calculation.

Payroll contributions stop automatically when a the MAC limit is reached. However, employees who exceed their 2000 MAC limit before the 2000 limit was established in EDB on March 20, should be sure to file an appeal. If an appeal is not filed, the amount contributed in excess of the 2000 limit will be refunded. The refunded amount, plus earnings, will be taxable income for the year in which it is received.

The MAC calculation is based on certain employee data in the payroll system as of January 1, 2000. For example, salary and appointment information as of January 1, 2000 is used to project the "expected 2000 gross University salary". This projected salary is an important part of the MAC calculation and is shown on the Explanation of Data.

So, if the salary/appointment data is wrong or incomplete as of January 1, 2000, the "expected 2000 gross University salary" will also be wrong in the MAC calculation. For example, if an employee is on a leave of absence without pay as of January 1 but returns to work and full pay in February, the lower January salary will be used in the MAC calculation to determine the "expected 2000 gross University salary". The end result is an "expected 2000 gross University salary" that is lower than it should be. This is an example of an item that if appealed and corrected would probably result in a higher MAC.

Participants who believe that incorrect data elements were used in their MAC calculation should file an appeal. The first step in the appeals process is for participants to obtain an "Explanation of Data". The "Explanation of Data" form explains the various pieces of data used to calculate the MAC.

1. Telephone bencom.fone at 1-800-888-8267 and then press 1,

2. Press 1 again for Personal Accounts and Transactions; enter the Social Security number and PIN; (Employees who have lost or forgotten their PIN can reset it on the Internet by going to https://ucfy.ucop.edu),

3. Press 1 again for Retirement and Investments,

4. Press 4 to access 403(b) MAC information,

5. Press 1 to hear the MAC amount and then press star (*) to return to the MAC menu; press 2 to have the Explanation of Data faxed to you; the fax will be received in minutes. Or, if you don’t have access to a private fax machine, press 3 to request a mailed copy of the "Explanation of Data"; the form will be sent to your address of record by U.S. Mail and will be received within 7 – 10 days.

1. Carefully review the information shown on the "Explanation of Data", especially numbers 1,2,3,4, and 10. For example, data element number 1 is "Expected 2000 Gross University Salary" and data element number 10 is "Years of University Employment". If the amounts shown for these categories are incorrect, gather documentation to establish the correct numbers. Examples of documentation include:

• Personal Action Forms (PAFs) or On-line equivalent
• Surepay Statements or check stubs
• Record of Earnings

2. Complete an Appeal Kit. There are 2 different Appeal Kits; one for employees with a break-in-service and a different one for employees without a break-in-service. Call the local Benefits Office on extension 40830 and request the applicable kit.

3. Send the appropriate forms, worksheets, and supporting documentation to the local Benefits Office as soon as possible but no later than Friday, September 22, 2000.

All appeals must be reviewed by the local Benefits Office before being forwarded to HR/Benefits in Oakland for recalculation. Please do not bypass the local Benefits Office. Any appeals received in Oakland without the local Benefits Office review and approval will be returned to you causing a delay.

Employees are encouraged to submit appeals as soon as possible since it may take up to 60 days for a response.

If the recalculated MAC differs by $100, the MAC will be changed. If the recalculation results in a lower MAC, the new lower MAC will stand.

The final 403(b) payroll deduction for the 2000 calendar year will be made from the paychecks as shown here:

Employees with at least 15 years of University employment as of December 31, 1999 and whose MAC is $10,500 may be eligible for increased contributions. This is called the Catch-Up Provision. To determine eligibility for the Catch-Up Provision, employees should complete the 2000 Tax Deferred 403(b) Catch-Up Provision Worksheet. Forward the completed worksheet along with copies of W-2's for the past five years, the "Explanation of Data", and a new Salary Reduction Agreement (UPAY 801) form to the local Benefits Office.

Employees who elected the Special Catch-Up Provision last year and wish to do so again for 2000, only need to provide a copy of their W-2 for 1999.

Section 415 of the IRC provides three alternative limits that may increase the amount employees can contribute to the 403(b) Plan

Alternative A: Year of Separation from service limit which may be used only once in a lifetime,

                                        Alternative B: Any year limit, and

Alternative C: Overall limit which may be used in any year instead of the Maximum Exclusion Allowance (MEA)

Employees should consult with their accountant or tax advisor before electing one of the IRC Alternatives. The three limits are mutually exclusive so that if an employee elects one alternative, a different one may never be elected in a subsequent year. However, if an Alternative is elected, employees can always revert back to the General Limit MAC calculated by HR/Benefits.

Employees interested in appealing their 2000 MAC, electing the Catch-up Provision or an Alternative Contribution Limit can obtain the required forms and/or worksheets from bencom.fone at 1-800-888-8267 (press 1), the Internet at www.ucop.edu/bencom or the local Benefits Office by calling extension 40830.

Please send all completed forms, worksheets, and supporting documents to the local Benefits Office at 10920 Wilshire Blvd., Suite 200, Los Angeles, CA 90024      Mailcode 146548.

The forms, etc., should be sent to the local Benefits Office as soon as possible but no later than Friday, September 22, 2000. Remember, the sooner employees increase their MAC, the sooner they can make additional contributions to the 403(b) Plan.

The Benefits Services office regrets it is unable to provide individual appointments for employees who want more information about the annual 403(b) process and how it works. However, How To Workshops will be conducted on the following dates; employees who have questions or need assistance should plan to attend one of the following:

Reservations are NOT required at these workshops, however because of space limitations employees arriving late may be asked to attend a later session.

Employees should bring the following to the Workshop:

1. a hand- held calculator, and
2. their personal Explanation of Data – see above for How to Request an Explanation of Data.

If you have any questions, please call the Benefits Office at extension 40830.

2000 403(b) MAC Process

The Internal Revenue Code (IRC) 415 limit for the calendar year 2000 has been increased to $10,500. The MAC limits that were set at $10,000 for 1999 will remain in effect until the 2000 MACs are calculated and set in the payroll system on approximately April 1, 2000.

Participants who elected alternative limits in 1999 will NOT have those amounts replaced by their MAC General Limit (that is, the least of their 415 limit, MEA limit, or $10,500) on April 1, 2000, as in past years. Instead, the 1999 limits will remain in place (up to $10,000) through June 30, 2000. In March, alternative contribution election packets will be sent to all active participants who elected an alternative limit in 1999. The alternative election forms may be submitted to the local Benefits Office right away. Participants whose alternative MAC election forms for 2000 are processed before June 1 will have their 1999 alternative MAC limits changed directly to their 2000 alternative MAC limit amounts by June 30 so they may continue to contribute without interruption. However, those who do not submit their election forms by June 1, 2000 will have their 2000 MACs set to their 2000 General Limit on July 1, 2000. Participants may submit election forms through September 22, 2000.

The maximum limit under the Catch-Up provision for the 2000 calendar year is $13,500. Employees who qualified for "Catch-Up" in 1999 will have had their MACs reset to $10,000 by the payroll system as of January 1, 2000. Catch-up amounts for 2000 should not be determined until the participants’ Maximum Exclusion Allowances (MEAs) and 415 limits have been calculated and set for the current year.

Employees who were hired or rehired on or after February 1, 2000 should request a MAC calculation by calling the local Benefits Office at extension 40830.

Personalized information about employees’ MACs will be available on the Internet on approximately April 1, 2000. Go to www.ucop.edu/bencom and click on the Savings & Investment Plans icon. This is where employees will find the 2000 MAC and current 403(b) Plan elections. Employees may also change their 403(b) salary reductions on the Internet.

Changes in tax laws affecting the 2000 contribution limits have rendered the 1999 MAC-related worksheets obsolete. Please discard any 1999 worksheets you may have.

The local Benefits Office is not able to provide individual counseling appointments for employees who need help with this process. However, the local Benefits Office will be conducting several two-hour sessions over the next few months for employees who want more information about (1) the MAC appeal process, (2) the Catch-Up provision, and (3) how to complete worksheets. The schedule of workshops will be announced very soon.

The MAC appeal deadline for 2000 is Friday, September 22, 2000. Appeal kits must be reviewed and approved by the local Benefits Office before forwarding to HR/Benefits in Oakland. Please encourage employees to process the appeal paperwork as early as possible. This is especially important if they expect to begin deductions before the end of the year

CalPERS announces 2000 Application Period for Long-Term Care Program

More than 128,000 California public employees, retirees, schoolteachers and their families have taken advantage of the CalPERS Long-Term Care Program. Because long-term care is so important to people at any age, the program is now being offered again. The 2000 Application Period will begin April 1, 2000 and end of June 30, 2000. If you missed out last time don’t miss the opportunity to apply.

Enhanced Benefits: The 2000 Application Period will provide new applicants the opportunity to choose from a broader array of benefit options in each of three Long-Term Care Plans. The new benefit options will have lower benefit amounts for nursing home care, assisted living facility care, home care and more affordable rates.

Here are some key facts:

© UCLA Campus Human Resources
March 2000