HR Update; November 17, 2006

In this Edition

UC Seeks State Funding to Match Employee UCRP Contributions

At their November meeting, UC Regents were presented a state budget proposal for 2007–08 that included a request for funding that would allow UC to match employee contribution levels to the UC Retirement Plan (UCRP) when contributions to the plan are reinstated. The Regents had already specified that contributions should restart as of July 1, 2007, allowing for lower initial contributions that would gradually increase over time in order to soften their financial impact on both employees and the University, and avoid a reduction in employee net take-home pay as a result of the contributions restarting. Read more at the Future of the UCRP website.

The move to restart contributions comes after a long funding holiday, since the early 1990s, when the Regents suspended all contributions to the UCRP because very favorable investment earnings led to a surplus of assets needed to support the ongoing costs of the plan. However, that surplus has been declining steadily, so contributions to the UCRP will need to be reinstated to ensure funding for retirement benefits for all UCRP participants. As stated at the July Regents meeting, UC’s intent for the initial restart is to redirect into the UCRP the mandatory contribution employees currently make to their DC Plan accounts (just under 2% for most participants). This means there will be no reduction in take-home pay due to the restart of pension plan contributions.

The contribution restart on July 1, 2007 is subject to the availability of funding, the budget process and collective bargaining for represented employees. Most importantly, UCRP benefits are not being cut. UC remains committed to providing its employees with competitive total compensation, including retirement benefits.

Actuary’s report shows UCRP surplus continues to decline

The latest actuarial report on the UCRP’s funded status shows that the plan’s surplus continued to decline in the most recent plan year, July 1, 2005, through June 30, 2006. (The actuarial report—will be available Nov. 16.) Meanwhile, accrued liabilities (the value of employee benefits that the plan has promised to pay) continue to increase. The report notes that when the surplus is depleted, the amount required to keep the plan fully funded “will go from zero to the full normal cost very suddenly, i.e., in only one or two years.” The Regents have made it a high priority to ensure the long-term viability of the retirement program for the benefit of all UC employees. Learn more about why restarting contributions early helps everyone).

The Regents have stated that restarting contributions in order to protect the future of UCRP is a prudent measure, especially at a time where failing public and private pension plans are making the news across the country.

Open Enrollment for 2007 is Underway through Midnight, November 21

Have you visited the Open Enrollment website yet to check your current plan enrollments, review medical plan premium rates for 2007, read about plan changes and other important information for 2007, and consider changes you may want to make? If not, we encourage you to go online to the site now and not wait until the last minute!

We encourage you to consider enrolling in the Health Care Reimbursement Account (HCRA) program. Read the following information to see how HCRA may benefit you and help you to take charge of your out-of-pocket health care expenses:

Inventory your out-of-pocket health care expenses: Should you open a Health Care Reimbursement Account (HCRA)?

You may not be aware of how many kinds of out-of-pocket health care expenses are eligible for payment from a HCRA account—and you might be surprised to see how many expenses you actually pay.

REMINDER: Enroll in a HCRA account for 2007, or re-enroll if you participate this year.

Use pre-tax dollars to pay qualified health care expenses while reducing your tax liability at the same time—your tax savings can lessen the impact of medical plan premium increases.
Use the convenient new spending account card in 2007 to pay for qualified expenses*—you won’t have to pay expenses out of your pocket or file reimbursement claim forms when you use the card.

*(Be sure to save all your receipts when you use the card so that you’ll have them available in case they are required to document your purchase.)

You can find links to details about HCRA and the card online.

What kinds of expenses can be paid using HCRA?

Consider the kinds of health care expenses you may be paying in 2007 that would make a HCRA account worthwhile for you. You can see a comprehensive list of eligible expenses online at the SHPS website (SHPS, Inc. administers HCRA for the University):

There are hundreds of items in the alphabetical SHPS list, some obvious and some not so obvious. You’ll find items from air conditioners, purifiers, or humidifiers for allergy relief; to chiropractic services; to guide dogs; to medical alert bracelets; to stop-smoking programs; to transportation for medical care; to waterbeds if physician-recommended for a specific condition. And, the site also lists a large variety of qualified over-the-counter (OTC) drugs and products.

How to inventory your expenses

HCRA annual account limits range from a minimum of $180 to a maximum of $5,000. You can use the convenient “FSA Calculator” on the SHPS website to estimate what your 2007 out-of-pocket expenses will be—go to:
http://www.shps.net/...

Fill out the calculator entries carefully, and you’ll get a good idea of what you’ll be spending on health care next year, plus an estimate of the tax savings you’ll enjoy if you decide to enroll in HCRA.

Examples of HCRA-eligible out-of-pocket expenses:

MEDICAL (Based on the medical plan you have):

Physician visit copayments – $15 to $20 per visit
Physician visit coinsurance payments (most non-HMO Plans) – 20% to 40% of the charge for each visit (normally at least $100)
Emergency room copayment – $50 to $75 if not hospitalized
Inpatient hospitalization copayment – $250
Inpatient hospitalization coinsurance payment (most non-HMO plans) – 20% to 40% of the hospital bill
Annual deductibles in some plans – $500 to $3,000 based on plan and coverage
Chiropractor (HMO plans) – You pay the full amount
Prescription drug copayments at retail outlets or mail order – $10 to $80 per prescription depending on the quantity and whether generic, brand name, or non-formulary

DENTAL (Using Delta Dental PPO Plan as an example):

Basic & major dentistry annual deductibles – $50 per person
Composite resin fillings – Up to $60 per filling
“Deep cleaning” (scaling & root plaining) – Up to $200
Surgical extraction with anesthesia – $110 or more
Porcelain crown – $528
Youth comprehensive orthodontic treatment (three year treatment) – $1,961 per year
Prescription drugs – You pay the full cost

VISION

Annual office visit/exam copayment – $10
Materials copayment (glasses) – $25
Glasses lenses – You pay additional costs for blended lenses, coated lenses, progressive bifocals, etc.
Frames – You pay frame costs that exceed the $130 paid by the plan
Elective contact lenses – You pay from $40 to $490 (the plan pays up to $110) depending on the type of lens, plus 15% of the exam charge

EXAMPLES OF OVER-THE-COUNTER MEDICATIONS & SUPPLIES

Contact lens supplies/solutions
Pain/fever/inflammation relievers: Aspirin, ibuprofen, acetaminophen, etc.
Cold/flu medications
Allergy medications
First aid supplies, bandages, etc.

Important rules about eligible expenses—the expense must:

Be allowed by the IRS;
Be incurred during the plan year (January 1 through March 15 of the following year);
Be for you or a your legal spouse or qualified tax dependent;
Not be used as a health care deduction on your personal tax return.

At Your Service New Employee Online Benefits Enrollment Program to Temporarily Shutdown

Please be advised that the online Benefits Enrollment (aka New Hire) application at the At Your Service website will be shutting down this year on December 8th at 2 p.m.

The application typically closes around mid-December and stays closed until the 2nd business day in the New Year to ensure that local year-end updates have run, and our application is correctly reflecting the New Year’s enrollments and rates. During this closure, employees who are in their PIE must complete their enrollment using the paper form(s).

This year, it’s being closed a week earlier to prepare for the rollout of a completely new and improved New Employee Online Benefits Enrollment application at the beginning of 2007. If an employee with a PIE does not complete his/her enrollments by 2 p.m. on December 8th, he/she will need to complete it by paper.

Please advise newly hired/eligible employees of this appropriately.

Check out the PIE Calculator online: http://ucsfhr.ucsf.edu/apps/pie.php

UC Retirement and Savings Education Programs

Please tell your colleagues, circulate invitations, post the actual schedules, or otherwise re-broadcast these weekly reminders about our valuable (FREE) education programs for faculty and staff.

“The Features of the UC Retirement Plan” (UCRP)

Refer to this schedule for details and future workshops

UC Retirement Savings Programs-the 403(b), 457(b) and DC Plans

November 20th: SFGH, Carr Auditorium, 12:00 - 1:00 p.m.

“Achieving a Sound Retirement”

November 21st: Parnassus, Millberry Union City Lights Room, 12:00 - 1:00 p.m.

“Enrolling in Your UC Retirement Savings Program”

Refer to this schedule for details and future workshops

Usually there can be at least one (or more) workshop(s) per week scheduled at various UCSF locations around town. For more details and listings for upcoming scheduled presentations, please refer to our Workshops and Presentations Schedules menus found at our local UCSF HR/Benefits website.

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