• printer friendly
• mail this article
• iPod format
• digg

When Andrew Bokarius began working at a neuroscience laboratory this summer, the thought of retirement was distant.

Bokarius took the job to get research experience and explore what it would be like to work in a research lab. But a career – the kind that would hopefully come with retirement benefits – was still something that loomed in his post-university future.

So when the third-year physiological sciences student received a notice from the University of California last quarter telling him that he had a small amount of money in a retirement savings account, he was more than a little confused.

“Am I really planning to be here for so long that there will be some type of retirement plan for me?” he remembered wondering when he received the notice.

“Thinking of a retirement plan at my age is not ordinary,” he said.

UC student employees who carry full course loads do not have retirement plans, but the UC’s Defined Contribution Plan automatically enrolls UC student workers if they drop below full-time status, work more than 20 hours per week for more than five weeks straight, or earn money while they are not enrolled in classes.

Bokarius was one of many UC students who received balance statements last quarter from the Defined Contribution Plan, which is part of the UC’s retirement savings program. UC officials couldn’t immediately provide an exact number of student workers enrolled in retirement plans.

The statements that went out last quarter were the first in more than two years.

Until July 2005, the UC managed its own retirement accounts, and it stopped sending paper notifications in 2003 because it was too expensive to send them to the hundreds of thousands of UC employees who were covered under the plan, said Sharon Perry, a representative for UC Human Resources and Benefit Services.

But when they transferred management of the plan to Fidelity Investments Tax-Exempt Services Company in July, the company decided to send out statements. The statement for the fourth quarter of 2005 is currently in the mail, and should arrive in the next few weeks, said Maria Baklanova, a retirement service specialist for Fidelity.

The Defined Contribution Plan was established in 1990 to provide UC employees with a retirement savings account they can take with them when they leave the university or roll over into other accounts such as 401(k) plans. All UC employees, except specifically exempted ones, had to participate.

If students fall below full-time status or work while not enrolled in classes, they are covered under the plan’s enrollment criteria, Perry said.

Bokarius questioned whether a student could contribute enough to the plan to make it worthwhile.

“It’s probably a great idea for people who would be working for quite a while, but as a student, how much are you earning?” he asked. “It really doesn’t seem efficient for students to get it.”

But the money isn’t gone forever – students will have their money refunded when they finish their employment at UCLA.

Former UC employees can cash out by calling Fidelity or can choose to have their savings transferred to another retirement account.

If employees fail to collect their savings upon leaving the university, they will be sent a notice which gives them the option of cashing out the money or transferring it to another account. If an employee does not act on the notice, the university will send that person a check for their balance after taxes and a 10 percent penalty.

When some student workers received statements about their Defined Contribution Plan balances last quarter, they were unaware of the plan.

This was the case for Iris Cheung, who transferred to UCLA this year and began working for the BruinCard office several weeks before fall quarter began.

Near the end of the quarter, when the third-year economics student received a statement about the balance of her retirement account, she was confused. But since she had less than $10 in her account, she soon forgot about it, she said.

“They should send an e-mail after we get hired” to avoid confusion, she said.

Student employees are informed about the Defined Contribution Plan, but the details are in the fine print.

The new-hire input form from UCLA Human Resources references the plan in a section titled “statement concerning your employment in a university position not covered by Social Security,” but it is not explained. The plan is defined in section 311 of the human resources Student Employment Policies statement, which new Associated Students UCLA employees are asked to read online.

According to the policy document, nonexempt student employees pay 7.5 percent of their pretax paychecks into the account.

The money automatically goes into a UC-managed savings account, which is tax-free. Account holders can choose to shift the money into mutual funds with Fidelity Investments or one of five UC-managed investment funds.

ASUCLA’s student employment policies can be found at

www.asucla.ucla.edu, and Fidelity can be reached at (866) 682-7787.