When employees last contributed to the UC Retirement Plan, officially a defined benefit plan, or DBP, the university figured assessments by calculating 2 percent, 3 percent or 4 percent of each member's gross pay, then subtracting $19.

In fact, since the "contribution holiday" began in 1990, retirement plan members have been required to contribute the same amounts to a defined contribution plan, or DCP, which provides an individual investment account for each participant. How much each participant gets upon retirement depends on how much he or she put in, and the account's gains and losses over the years, according to the online research site About.com.

A DBP promises specific monthly benefits at retirement and may state this as an exact dollar amount, or monthly benefits can be calculated through a formula that considers a participant's age, salary and service, said Liz Hansen, benefits and insurance contracting manager with UC Davis Human Resources.

According to the online research site About.com, a DBP participant is generally not required to make contributions in a private sector fund, while most public sector funds require employee contributions.

In DBPs, participants are not required to make investment decisions, whereas DCP participants can direct their investments, according to About.com.

UC implemented the DCP assessment because retirement plan rules require annual member contributions even if that money is redirected, Hansen explained. In this case, members' money is being put into individual accounts instead of the overall pension fund.

When the university directs contributions back to the DBP in 2007, Hansen said, the DCP redirect will stop. Here are the DCP contribution rates now in effect:

• Retirement plan members with Social Security, 2 percent minus $19 up to the Social Security base wage of $94,200, and 4 percent minus $19 for gross pay over $94,200. The Social Security base wage is subject to revision annually.
• Members without Social Security, 3 percent minus $19.
• Safety members (fire and police personnel), 3 percent minus $19.

— Dave Jones