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Defined Contribution Plan

To qualify for exemption from DCP withholding:

  • Undergraduate student employees must be registered and enrolled in a minimum of 6 or more units per term for fall, spring or summer sessions.
  • Graduate student employees must be registered and enrolled in a minimum of 6 units per term for fall and spring sessions, or 2 units for summer sessions.

Maximum appointment percentage allowed to qualify for exemption from withholding:

  • Berkeley campus undergraduate and graduate student employees must be appointed a total of 49% or less of full time.

Note: All student employees holding F1 and J1 visas will be exempt from these withholding requirements.

Students who do not meet exemption criteria will be required to contribute 1.45% of their gross earnings to Medicare and 7.5% of their gross earnings to the Defined Contribution plan (DCP), a tax-deferred University retirement program which is an alternative to OASDI (Social Security).

The DCP contributions remain the property of the student from whom they are withheld. Contributions are made on a pre-tax basis, which reduces the student’s tax liability in the year in which the contributions are made.

Taxes on the contributions and any earnings are deferred until the employee withdraws the money, which can occur upon termination of UC employment. As the DCP is a retirement plan, special rules, such as possible penalties for early withdrawal of accumulations, do apply.

When you are no longer a UC employee contact Fidelity at 1-800-343-0860 and let them know you want to collect your distribution.