403(b) & 457(b) Payroll Deductions

With the final few paydates for 2012 approaching, now is the time to plan if you wish to maximize your pre-tax contributions to the UC Retirement Savings Program’s 403(b) and 457(b) plans for this calendar (taxable) year, or to make changes. This memo contains helpful information about when and how to process changes for the next few paydates. Changes you make now will continue in 2013 so don’t forget to readjust your contributions once 2013 begins, if that is consistent with your wishes.

How Much Have You Contributed So Far This Year?
Go to AtYourServiceOnline in Related Information. After you sign-in, click on “Earnings Statement” in the “Income and Taxes” section. Select the most recent paydate and click on “View Statement” in the right-hand column and then scroll down to see Year-to-Date Totals.

2012 Maximum Annual Contribution (MAC) for Each Plan
The MAC for each plan is $17,000, or $22,500 if you are age 50 by December 31, 2012. Payroll deductions automatically stop when these limits are reached. (If you have 15 years of service with UC as of December 31, 2011, you may be eligible to contribute an additional $3,000 in 2012 under the Lifetime Catch-up provision; contact Fidelity for details.)



 Processing Windows for Final Paydate(s) of 2012
PlanMonthly Payroll Bi-weekly Payroll
(benefits holiday*)
457(b)8-1 thru 8-318-1 thru 8-318-1 thru 8-31
403(b)8-25 thru 9-189-21 thru 9-2710-4 thru 10-12
 11-1-201211-7-2012 11-21-2012
457(b)9-1 thru 9-30 9-1 thru 9-30 9-1 thru 9-30
403(b)9-25 thru 10-19 10-19 thru 10-26 11-2 thru 11-9
(final 2012 pay date)
(final 2012 pay date)
457(b)10-1 thru 10-31 10-1 thru 10-31 10-1 thru 10-31
403(b)10-26 thru 11-15 11-16 thru 11-2111-30 thru 12-7


*Benefits Holiday means that only percentage (%) deductions will be taken from this paycheck and flat dollar deductions such as for medical, parking, and credit union will not be taken, including flat dollar deductions for 403(b) and 457(b) plans.


How to Make Changes

  1. By Phone: Call Fidelity Retirement Services at (866) 682-7787, Monday thru Friday, 5 a.m. to 9 p.m. (Pacific Time). After the prompts, enter your Social Security Number and PIN, or your User ID and PIN. When you hear “Main Menu,” say “Representative,” or
  2. Online: Go to Fidelity's website in Related Information. Login and select the applicable Plan, select “Contribution Amount” under “Act” in the left-hand column and then follow the prompts. Online transactions can be processed 24 hours a day, 7 days per week.

Payroll Deduction Methods
You may select either the “percentage” or “flat dollar” payroll deduction method for the 403(b) and 457(b) deductions. There is one important frequency difference between these methods as outlined below.

  1. Percentage (%) Payroll Deduction Method
    If you use this method, a payroll deduction will be made from ALL paychecks, including special payments such as Staff Recognition Awards, Health Sciences Special Compensation Plan payments (commonly known as “Z” payments), terminal vacation pay, etc.
  2. Flat Dollar Payroll Deduction Method*
    If you use this method, a deduction will be made from paychecks you receive on your “primary” pay cycle only. This means that if you receive a special paycheck other than the one for your “primary” pay cycle, or other special payment (such as Staff Recognition Awards, “Z” payments, terminal vacation pay), a 403(b)/457(b) deduction is not taken from any special payments.

*For monthly paid employees, typically paid on the first of the month, a “flat dollar” deduction is one monthly deduction. For bi-weekly paid employees, the “flat dollar” monthly amount is evenly divided between two bi-weekly pay periods ending in the month, excluding any third bi-weekly pay period in the month which is typically a Benefits Holiday.

Are you enrolled in both the 403(b) and 457(b) Plans?
If you use the “percentage” payroll deduction method for the 403(b) and 457(b) plan, and the overall total to be deducted from both plans is 100% or more, the payroll system will not take either one. For example, no deduction will occur for either plan if you elect a 70% deduction for each plan, 50% for each plan, 70% for one plan and 30% for the other plan, or any other combination where the overall total of the “percentage” to be deducted for both plans equals 100% or more.

Be sure the overall total to both plans combined is less than 100% and is a percentage that will leave sufficient earnings to cover any required tax deductions such as OASDI and Medicare and after-tax benefit premiums (see next paragraph). For example, deduct 40% to one plan and 45% to the other (85% total), or 25% to one plan and 50% to the other plan (75% total). Or, elect the “flat dollar” method to one plan and the “percentage” method to the other. Or, if you have reached your 403(b) Maximum for the year, you may want to reduce or cancel the percentage for that plan and increase your 457(b) percentage to 70%, or vice versa.

Effect on After-Tax Benefit Plan Payments
If you have other “pre-tax” payroll deductions such as for medical, parking, flexible spending account(s), etc., these deductions will come out of your pay before the 403(b)/457(b) contributions are applied. However, any “after-tax” payroll deductions such as for disability, life insurance, legal, etc. are deducted after 403(b)/457(b) plan contributions are applied, so be sure sufficient funds remain for those payments. While missed insurance payments are held in suspense for a short period of time, if your payment is missed for two months or more, your insurance plan will be cancelled. We encourage you to monitor your paychecks to be sure that all after-tax benefit deductions have been taken and if not, make arrangements for direct payment of those premiums with your benefits office.

What about 2013?
At press time for this memo, the Internal Revenue Service had not announced what the Maximum Annual Contribution limits will be for 2013. As soon as the new limits are known, they will be widely announced. If you want to change your payroll deductions for the first paydate in 2013, mark your calendar as follows:


 Processing Windows for First Paydate(s) of 2013
Plan  Monthly PayrollBi-weekly Payroll
 1-2-20131-2-2013 1-16-2013
457(b) 11-1 thru 11-3011-1 thru 11-3011-1 thru 11-30
403(b)11-23 thru 12-1412-14 thru 12-17 12-22-2012 thru 1-4-2013

If you want to make any changes, call Fidelity at (866) 682-7787, or go online as outlined above. If you have any other questions or don’t know what your “primary pay cycle” is, contact the person in your department who handles benefits/personnel issues or call Campus Human Resources, Benefits Services at  (410) 794-0830, or Healthcare Human Resources at (310) 794-0500.



Campus Human Resources, Policy Services
Phone: (310) 794-3147 | Fax: (310) 794-0865

UCLA Healthcare Human Resources
Phone: (310) 794-0500 | Fax: (310) 794-0620