University of California, San Diego


February 14, 2000


SUBJECT:    403(b) Plan Participation is FREE MONEY For Almost Everyone


We, the members of the UCSD Academic Senate Committee on Faculty Welfare, urge you to consider participating in the 403(b) retirement plan if you are not already doing so. Despite the fact that this program is an important benefit which can contribute dramatically to one's financial well-being in later years, at last count, UCSD faculty participation in this plan was only 30%. The 403(b) plan is similar to other tax-sheltered retirement vehicles. You pay no taxes on the salary you invest in your 403(b) account until later when the money is withdrawn. Money in a 403(b) account starts out larger and grows faster than it would in a taxable investment. This is because the principal comes from before-tax income, and the return is reinvested untaxed. An illustration of the potential financial benefit arising from long term participation in the 403(b) plan can be found at: http://www-hr.ucsd.edu/~benefits/rosstarr.html,created by Professor Ross Starr from our own UCSD Department of economics.

Bottom line: Use your University of California Tax Deferred 403(b) Plan. It's a superb way to invest money for your future retirement.

For more information: Contact the UCSD Benefits Office (x42816), departmental benefits representatives, or the UC website at: http://www.ucop.edu/bencom/rs/dcps.html. UC Benefits Customer Service in Oakland, California, can be reached at 1-800-888-8267.

How much to invest in your 403(b) plan? For most of us, there is an annual limit of $10,500. However, your particular maximum exclusion allowance (MEA) is calculated for you by UC benefits each April. You can access your limit through bencom.fone or via the web by using your Personal Identification Number (PIN). The campus Benefits Office can also provide that information, as well as assist you in arranging a PIN if you do not know yours.

Where to invest your 403(b) money? 403(b) savings plan participants may invest their contributions in any of six UC-managed investment funds. To find out more about investment returns and specific fund objectives for the UC-managed funds, and for information about mutual fund options available through Fidelity Investments and the Calvert Group, visit the "Tax-Deferred 403(b) Plan and Defined Contribution Plan" web page at the address above. A UC brochure entitled "Investing for Tomorrow's Retirement Today" is available from the Benefits Office, or you may request a copy from the benefits contact in your department.

Douglas H. Bartlett, Chair
Bruce Lehmann, Vice Chair
George E. Backus
David L. Braff
Joseph D. Goddard
Joseph M. O'Connor
Chris N. Parry