[UCRDBR] UC 403(b) Loan Repayment Change: Employee ACH Setup Required by 5/20/26

Wed Apr 15 10:35:16 PDT 2026

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April 15, 2026

To:
Department Benefits Representatives (DBRs)
From:
Central HR Benefits Office on behalf of UC Office of the President
Re:
UC 403(b) Loan Repayment Change: Employee ACH Setup Required by 5/20/26

DBRs, please share this information via your internal listserv.  Please do not reply to this email.  Please send a separate email with questions to benefits at ucr.edu<mailto:benefits at ucr.edu>.

As a follow‑up to the UCOP original communication dated February 13, 2026 (see below), effective Wednesday, April 8, 2026, UC 403(b) Plan loan repayments are no longer deducted from employee paychecks. All repayments must now be made through Fidelity’s Automated Clearing House (ACH) service.
To keep the 403(b) Plan loan in good standing, employees must set up ACH repayments by May 20, 2026. As part of this process, employees must add personal bank account information and select a monthly debit date in Fidelity NetBenefits® at www.netbenefits.com<http://www.netbenefits.com/> or by calling Fidelity at 1‑866‑682‑7787. For biweekly paid employees, loan repayments will change from a biweekly payroll deduction to a monthly ACH debit.
Important reminder about missed 403(b) loan repayments
If an employee does not establish ACH loan repayment, the loan could “default” and be treated as a taxable distribution for the outstanding loan balance. This would make the balance subject to income tax and potentially a 10% early withdrawal penalty. A Form 1099‑R will be issued by Fidelity in January of the year following the default. A defaulted loan may also affect an employee’s eligibility to request additional loans.
Participant questions
For questions about this transition or how to set up ACH loan repayments, please call a Fidelity representative at 1‑866‑682‑7787. Representatives are available Monday through Friday, 5:30 AM to 5:00 PM Pacific Time.
Communications and resources
Fidelity began sending communications about the UC 403(b) Plan loan repayment change to affected employees in February and will continue through September 2026. Attached is Fidelity’s most recent communication to affected employees. It includes instructions on how employees can set up or verify their ACH loan repayments.
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From: UCOP
Sent: Friday, February 13, 2026, 4:27 PM
Subject: Retirement Program Services – UC 403(b) Plan Loan Repayment Change: Transition to Fidelity ACH (Effective April 2026)
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Friday, February 13, 2026  (4:27 PM PST)
The University of California (UC) is implementing a change to how UC 403(b) Plan loans are repaid. Retirement Program Services is sharing this update to help employees prepare for the transition. The information below outlines what is changing, what employees need to do, and when these changes will take effect.
What’s changing
UC is updating the repayment method for UC 403(b) Plan loans. Currently, employees with an outstanding UC 403(b) Plan loan have their repayments deducted from paychecks and applied directly to the retirement account.
Beginning in April 2026, loan repayments will no longer be deducted from employee paychecks. Instead, employees must make loan repayments using Fidelity’s Automated Clearing House (ACH) service, which deducts payments directly from bank accounts.
What this means for employees

  *   Loan repayments deducted from employee paychecks are scheduled to end with paychecks issued after April 8, 2026.
  *   Employees must set up ACH loan repayments to continue making payments on loans. Instructions will be shared in future communications.
  *   For biweekly‑paid employees, the repayment schedule will change from biweekly to monthly.
How employees can prepare
Employees will be able to set up ACH loan repayments starting April 13, 2026. In the meantime, they can prepare for this change by:

  *   Ensuring they have an active bank account that can be used for ACH loan repayments.
  *   Considering how a monthly payment schedule may differ from their current biweekly deductions.
  *   Watching for emails beginning in March 2026 that will include step‑by‑step instructions for setting up ACH loan repayments.
Important reminder about missed repayments
If an employee does not establish ACH loan repayment, the loan could “default” and be treated as a taxable distribution for the outstanding loan balance. This would make the balance subject to income tax and potentially a 10% early withdrawal penalty. A defaulted loan may also affect the eligibility to request additional loans.
Participant questions
If employees have questions about this transition or how to set up ACH loan repayments, please call a Fidelity representative at 1‑866‑682‑7787. Representatives are available Monday to Friday, 5:30 AM to 5:00 PM Pacific Time.
Communications and resources
Fidelity will distribute communications about the UC 403(b) Plan loan repayment change to affected employees beginning with an initial notice by the week of Monday, February 16, 2026, and continuing through July 2026. Starting in March 2026, Fidelity will send emails with detailed, step‑by‑step instructions for setting up ACH loan repayments.

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