The UC Board of Regents announced a new retirement program for employees at their Nov. 14 meeting that is set to go into effect on April 1, 2003.

Under the plan, the equivalent of 5 percent of a qualifying employee’s salary would go toward a special account called the Capital Accumulation Provision, where the money would earn an unspecified rate of interest. That rate is currently about 7.5 percent.

The decision was made in part because of lowered state tax revenue and budget cutbacks, which decreased the overall amount of salary raises that the university said it could offer for UC employees. Systemwide, the university expects to offer salary increases of 1.5 percent.

“”Since we are only able to give modest raises on a systemwide basis this year due to the state’s budget deficit, we wanted to try to find additional forms of rewarding people financially,”” said Judy Boyette, associate vice president for human resources and benefits at the UC Office of the President. “”And even though this doesn’t increase employees’ incomes immediately, it does give them a financial boost later on.””

Those employees eligible for the program need to be members of the UC Retirement Plan, which includes career employees and employees who have logged at least 1,000 hours over a 12-month period. Ineligible employees include those who are disabled, retired or inactive members by the April 1 start date.

Retirement is defined by a benefit program set by a formula that looks at an employee’s service credit, age factor and highest average salary over a 36-month consecutive period of employment.

UC employees are eligible to retire at age 50. UCSD employs a total of 16,000 employees.

Jackie Edwards, benefits manager for campus human resources at UCSD, said participation in the retirement package is advantageous.

“”Actually, there’s a great advantage,”” she said. “”This money that is actually set aside earns interest to supplement retirement income.””

Edwards also said there is no risk to the earnings of the money.

“”If you were to invest it in a private stock option, you don’t know if it will increase or shrink,”” she said.

Should an employee leave the university, the money can roll over to another employer’s account, or the employee can take the money at retirement as a supplement to basic retirement income, according to Edwards.