Defined Contribution Plan (DCP): Pre-tax vs After-tax


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Overview


The Defined Contribution Plan (DCP) includes two kinds of accounts: the pre-tax account for mandatory contributions, and the after-tax/ rollover account for voluntary contributions, including the taxable portion of rollovers from other employer plans. Fidelity Retirement Services is the record-keeper for the DCP.

 

Critical Concepts


The DC Plan has separate accounts for pre-tax and after-tax contributions.  

The Pretax Account holds employer contributions and mandatory employee contributions from eligible members of the following groups:

The After-Tax Account contains voluntary employee contributions that are deducted from a participant’s net income.  

When enrolling in DCP after tax, the Payroll System is configured to stop the DC Plan After Tax contributions once the IRC maximum max is reached; participants may want to consult a tax advisor or financial planner before enrolling as contribution limits apply.

 

Additional Resources


If you have further questions or need assistance, contact the UCPath Center directly by submitting an inquiry at https://ucpath.universityofcalifornia.edu/.