University of California, San Diego

August 4, 1998
ALL AT UCSD (Including UCSD Medical Center)
SUBJECT:	Proposed Pre-Tax Parking Fee Program
This Notice is provided to the campus community as an initial notification
and opportunity to comment about a proposed pre-tax parking fee program.
The University proposes to implement a pre-tax parking program applicable
to employees who pay for parking by payroll deduction. Effective with
paychecks issued on September 1, 1998, it is proposed that all eligible
employees' payroll deductions for parking be taken on a pre-tax basis, up to
the IRS limit of $175 a month (at UCSD, there are no parking fees that
exceed the $175 IRS limit). Eligible employees wishing these deductions to
be taken on an after-tax basis would need to complete the
enrollment/cancellation form (Pretax Transportation Deductions Enrollment
or Cancellation Form), which can be found on the Web at
This program, which is based on recent changes in the Federal tax
laws, would result in tax savings. Eligible staff employees include both
non-exclusively represented employees and exclusively represented employees
currently covered by collective bargaining agreements. Application of the
program to exclusively represented employees not currently covered by
collective bargaining agreements would be subject to notice, meeting and
discussing, consulting or conferring, as appropriate.
Under the proposed pre-tax program, payroll deductions would not be subject
to withholding for Federal income taxes and FICA taxes (i.e., Social
Security and Medicare). The exact amount of savings an employee would
realize will depend on the employee's Federal tax bracket and whether the
employee is subject to full or partial FICA coverage.
California has not adopted the Federal law changes governing transportation
benefits. As a consequence, these deductions would still be subject to
State income tax withholding.
Reducing current taxable income for the proposed pre-tax program may impact
the maximum an employee can contribute annually to the Tax-Deferred 403(b)
Plan and the Defined Contribution Plan After-Tax Account. Any possible
impact would depend on the employee's individual circumstances.
Pre-tax deductions do not affect the salary used in calculating benefits
under the University of California Retirement Plan (UCRP).
The proposed pre-tax deduction process and impact are similar to those tax
savings programs currently in place, such as medical insurance premiums for
Prudential High Option, UC Care, and Health Net.
General inquiries and comments regarding the content of this Notice should
be directed to Jonnie Craig-Winston, Director of Policy Development and
Quality of Work/Life, at (619) 534-9659 or jcraig@ucsd.edu by August 14,
Specific inquiries regarding the pre-tax parking deductions for
Tax-Deferred 403(b) Plans and the Defined Contribution Plan After-Tax
Account should be directed to the Benefits Representative designated for
each vice chancellor's area at (619)534-2816. Specific parking fee
inquiries may be directed to the Parking and Transportation Office at
619)534-4223. Specific inquiries regarding payroll issues should be
directed to Eric Holmes, Campus Payroll Office, at (619)534-3249.
Rogers Davis
Assistant Vice Chancellor -
Human Resources