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Retirement Security

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Our UC retirement income is a form of deferred compensation. The University of California Retirement Plan (UCRP) is a defined benefit plan (DBP) under which your retirement income is based on a calculation of your years of UC service, your age at retirement, and your highest average 36 consecutive months of pay. Eligible UC employees hired before 2016 are enrolled in UCRP.

DBPs are a much more secure and predictable form of retirement income compared to defined contribution plans (DCPs) like a 401k plan. A 401k plan shifts investment risk from the employer to the employee and cannot guarantee a level of retirement income. DCPs also underperform over time compared to DBPs.

UCOP management is trying to shift away from a pension plan to a defined contribution plan. Employees hired after June 30, 2016 are given the option of choosing a 401k plan over the UCRP. As more employees leave the pension plan, it becomes less viable over time.