<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:x="urn:schemas-microsoft-com:office:excel" xmlns:dt="uuid:C2F41010-65B3-11d1-A29F-00AA00C14882" xmlns:m="http://schemas.microsoft.com/office/2004/12/omml" xmlns="http://www.w3.org/TR/REC-html40">
<head>
<meta http-equiv="Content-Type" content="text/html; charset=us-ascii">
<meta name="Generator" content="Microsoft Word 15 (filtered medium)">
<!--[if !mso]><style>v\:* {behavior:url(#default#VML);}
o\:* {behavior:url(#default#VML);}
w\:* {behavior:url(#default#VML);}
.shape {behavior:url(#default#VML);}
</style><![endif]--><style><!--
/* Font Definitions */
@font-face
{font-family:Wingdings;
panose-1:5 0 0 0 0 0 0 0 0 0;}
@font-face
{font-family:"Cambria Math";
panose-1:2 4 5 3 5 4 6 3 2 4;}
@font-face
{font-family:Calibri;
panose-1:2 15 5 2 2 2 4 3 2 4;}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0in;
margin-bottom:.0001pt;
font-size:11.0pt;
font-family:"Calibri",sans-serif;
mso-ligatures:standardcontextual;}
p.MsoListParagraph, li.MsoListParagraph, div.MsoListParagraph
{mso-style-priority:34;
margin-top:0in;
margin-right:0in;
margin-bottom:8.0pt;
margin-left:.5in;
mso-add-space:auto;
line-height:105%;
font-size:11.0pt;
font-family:"Calibri",sans-serif;
mso-ligatures:standardcontextual;}
p.MsoListParagraphCxSpFirst, li.MsoListParagraphCxSpFirst, div.MsoListParagraphCxSpFirst
{mso-style-priority:34;
mso-style-type:export-only;
margin-top:0in;
margin-right:0in;
margin-bottom:0in;
margin-left:.5in;
margin-bottom:.0001pt;
mso-add-space:auto;
line-height:105%;
font-size:11.0pt;
font-family:"Calibri",sans-serif;
mso-ligatures:standardcontextual;}
p.MsoListParagraphCxSpMiddle, li.MsoListParagraphCxSpMiddle, div.MsoListParagraphCxSpMiddle
{mso-style-priority:34;
mso-style-type:export-only;
margin-top:0in;
margin-right:0in;
margin-bottom:0in;
margin-left:.5in;
margin-bottom:.0001pt;
mso-add-space:auto;
line-height:105%;
font-size:11.0pt;
font-family:"Calibri",sans-serif;
mso-ligatures:standardcontextual;}
p.MsoListParagraphCxSpLast, li.MsoListParagraphCxSpLast, div.MsoListParagraphCxSpLast
{mso-style-priority:34;
mso-style-type:export-only;
margin-top:0in;
margin-right:0in;
margin-bottom:8.0pt;
margin-left:.5in;
mso-add-space:auto;
line-height:105%;
font-size:11.0pt;
font-family:"Calibri",sans-serif;
mso-ligatures:standardcontextual;}
.MsoChpDefault
{mso-style-type:export-only;
font-family:"Calibri",sans-serif;}
@page WordSection1
{size:8.5in 11.0in;
margin:.3in .3in .2in .3in;}
div.WordSection1
{page:WordSection1;}
/* List Definitions */
@list l0
{mso-list-id:660542882;
mso-list-type:hybrid;
mso-list-template-ids:1543640162 67698689 67698691 67698693 67698689 67698691 67698693 67698689 67698691 67698693;}
@list l0:level1
{mso-level-number-format:bullet;
mso-level-text:\F0B7;
mso-level-tab-stop:none;
mso-level-number-position:left;
text-indent:-.25in;
font-family:Symbol;}
@list l0:level2
{mso-level-number-format:bullet;
mso-level-text:o;
mso-level-tab-stop:none;
mso-level-number-position:left;
text-indent:-.25in;
font-family:"Courier New";}
@list l0:level3
{mso-level-number-format:bullet;
mso-level-text:\F0A7;
mso-level-tab-stop:none;
mso-level-number-position:left;
text-indent:-.25in;
font-family:Wingdings;}
@list l0:level4
{mso-level-number-format:bullet;
mso-level-text:\F0B7;
mso-level-tab-stop:none;
mso-level-number-position:left;
text-indent:-.25in;
font-family:Symbol;}
@list l0:level5
{mso-level-number-format:bullet;
mso-level-text:o;
mso-level-tab-stop:none;
mso-level-number-position:left;
text-indent:-.25in;
font-family:"Courier New";}
@list l0:level6
{mso-level-number-format:bullet;
mso-level-text:\F0A7;
mso-level-tab-stop:none;
mso-level-number-position:left;
text-indent:-.25in;
font-family:Wingdings;}
@list l0:level7
{mso-level-number-format:bullet;
mso-level-text:\F0B7;
mso-level-tab-stop:none;
mso-level-number-position:left;
text-indent:-.25in;
font-family:Symbol;}
@list l0:level8
{mso-level-number-format:bullet;
mso-level-text:o;
mso-level-tab-stop:none;
mso-level-number-position:left;
text-indent:-.25in;
font-family:"Courier New";}
@list l0:level9
{mso-level-number-format:bullet;
mso-level-text:\F0A7;
mso-level-tab-stop:none;
mso-level-number-position:left;
text-indent:-.25in;
font-family:Wingdings;}
ol
{margin-bottom:0in;}
ul
{margin-bottom:0in;}
--></style><!--[if gte mso 9]><xml>
<o:shapedefaults v:ext="edit" spidmax="1026" />
</xml><![endif]--><!--[if gte mso 9]><xml>
<o:shapelayout v:ext="edit">
<o:idmap v:ext="edit" data="1" />
</o:shapelayout></xml><![endif]-->
</head>
<body lang="EN-US">
<div class="WordSection1">
<p class="MsoNormal"><span style="font-size:9.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><a name="_Hlk161057670"></a><span style="mso-bookmark:_Hlk161057670"><span style="mso-ligatures:none"><img width="159" height="60" id="_x0000_i1025" src="cid:image001.jpg@01DA8F1B.BE93B0D0"></span><o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-bookmark:_Hlk161057670"><span style="font-size:6.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark:_Hlk161057670"><span style="font-family:"Arial",sans-serif"><o:p> </o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark:_Hlk161057670"><span style="font-family:"Arial",sans-serif">April 15, 2024<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark:_Hlk161057670"><span style="font-family:"Arial",sans-serif"><o:p> </o:p></span></span></p>
<table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="729" style="width:547.0pt;margin-left:-4.5pt;border-collapse:collapse">
<tbody>
<tr style="height:19.4pt">
<td width="103" valign="top" style="width:76.95pt;padding:0in 5.4pt 0in 5.4pt;height:19.4pt">
<p class="MsoNormal" style="mso-margin-top-alt:3.0pt;margin-right:0in;margin-bottom:3.0pt;margin-left:0in">
<span style="mso-bookmark:_Hlk161057670"><span style="font-family:"Arial",sans-serif">To:<o:p></o:p></span></span></p>
</td>
<span style="mso-bookmark:_Hlk161057670"></span>
<td width="621" valign="top" style="width:465.55pt;padding:0in 0in 0in 0in;height:19.4pt">
<p class="MsoNormal" style="mso-margin-top-alt:3.0pt;margin-right:0in;margin-bottom:3.0pt;margin-left:0in">
<span style="mso-bookmark:_Hlk161057670"><span style="font-family:"Arial",sans-serif">Department Benefits Representatives (DBRs)<o:p></o:p></span></span></p>
</td>
<span style="mso-bookmark:_Hlk161057670"></span>
</tr>
<tr style="height:19.95pt">
<td width="103" valign="top" style="width:76.95pt;padding:0in 5.4pt 0in 5.4pt;height:19.95pt">
<p class="MsoNormal" style="mso-margin-top-alt:3.0pt;margin-right:0in;margin-bottom:3.0pt;margin-left:0in">
<span style="mso-bookmark:_Hlk161057670"><span style="font-family:"Arial",sans-serif">From:<o:p></o:p></span></span></p>
</td>
<span style="mso-bookmark:_Hlk161057670"></span>
<td width="621" valign="top" style="width:465.55pt;padding:0in 0in 0in 0in;height:19.95pt">
<p class="MsoNormal" style="mso-margin-top-alt:3.0pt;margin-right:0in;margin-bottom:3.0pt;margin-left:0in">
<span style="mso-bookmark:_Hlk161057670"><span style="font-family:"Arial",sans-serif">Central HR Benefits Office on behalf of UC Office of the President<o:p></o:p></span></span></p>
</td>
<span style="mso-bookmark:_Hlk161057670"></span>
</tr>
<tr style="height:22.55pt">
<td width="103" valign="top" style="width:76.95pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:22.55pt">
<p class="MsoNormal" style="mso-margin-top-alt:3.0pt;margin-right:0in;margin-bottom:3.0pt;margin-left:0in">
<span style="mso-bookmark:_Hlk161057670"><span style="font-family:"Arial",sans-serif">Re:<o:p></o:p></span></span></p>
</td>
<span style="mso-bookmark:_Hlk161057670"></span>
<td width="621" valign="top" style="width:465.55pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;height:22.55pt">
<p class="MsoNormal" style="mso-margin-top-alt:3.0pt;margin-right:0in;margin-bottom:6.0pt;margin-left:0in">
<span style="mso-bookmark:_Hlk161057670"><b><span style="font-family:"Arial",sans-serif">Lincoln Financial - 2024 Disability Benefit Taxation</span></b></span><span style="mso-bookmark:_Hlk161057670"><span style="font-family:"Arial",sans-serif"><o:p></o:p></span></span></p>
</td>
<span style="mso-bookmark:_Hlk161057670"></span>
</tr>
</tbody>
</table>
<p class="MsoNormal"><span style="mso-bookmark:_Hlk161057670"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="mso-bookmark:_Hlk161057670"><b><span style="font-family:"Arial",sans-serif">DBRs, please share this information via your internal listserv.</span></b></span><span style="mso-bookmark:_Hlk161057670"><o:p></o:p></span></p>
<span style="mso-bookmark:_Hlk161057670"></span>
<p class="MsoNormal"><span style="font-size:9.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom:6.0pt"><span lang="EN" style="font-family:"Arial",sans-serif">The UC Disability Program offers both employer and employee-paid benefit plans though Lincoln Financial Group (LFG). Paid benefits subject to income tax
depends on who pays the insurance premiums.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="margin-bottom:0in;margin-bottom:.0001pt;mso-add-space:auto;text-indent:-.25in;line-height:normal;mso-list:l0 level1 lfo1">
<![if !supportLists]><span lang="EN" style="font-family:Symbol"><span style="mso-list:Ignore">·<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><b><span lang="EN" style="font-family:"Arial",sans-serif">Basic Disability</span></b><span lang="EN" style="font-family:"Arial",sans-serif"> – UC pays premiums and benefits are generally taxable.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="margin-bottom:0in;margin-bottom:.0001pt;mso-add-space:auto;text-indent:-.25in;line-height:normal;mso-list:l0 level1 lfo1">
<![if !supportLists]><span lang="EN" style="font-family:Symbol"><span style="mso-list:Ignore">·<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><b><span lang="EN" style="font-family:"Arial",sans-serif">Voluntary Short<span style="color:#00B050">
</span>and Long Term Disability</span></b><span lang="EN" style="font-family:"Arial",sans-serif"> – Employees pay premiums after payroll tax and benefits are generally not taxable.
<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN" style="font-family:"Arial",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN" style="font-family:"Arial",sans-serif">The Basic and Voluntary Short-Term Disability (VSTD) plans provide benefits for a maximum of 6 months and are paid concurrently if an employee is enrolled in VSTD. In this instance,
Lincoln Financial Group consolidates payments from both plans into one check. Each year, LFG follows IRS guidelines to determine the percentage of disability benefits subject to taxability. For 2024, 15.78% of combined Basic and VSTD disability benefit payments
are taxable. This is a slight reduction from 2023. <o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN" style="font-family:"Arial",sans-serif"> <o:p></o:p></span></p>
<div align="center">
<table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="595" style="width:445.9pt;border-collapse:collapse">
<tbody>
<tr style="page-break-inside:avoid;height:23.05pt">
<td width="595" nowrap="" colspan="3" valign="top" style="width:445.9pt;border:solid #7F7F7F 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:23.05pt">
<p class="MsoNormal" align="center" style="text-align:center"><b><span style="font-family:"Arial",sans-serif">Taxability of Disability Benefits<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="page-break-inside:avoid;height:23.05pt">
<td width="402" nowrap="" valign="top" style="width:301.35pt;border:solid #7F7F7F 1.0pt;border-top:none;padding:0in 5.4pt 0in 5.4pt;height:23.05pt">
<p class="MsoNormal"><b><span style="font-family:"Arial",sans-serif">Plan<o:p></o:p></span></b></p>
</td>
<td width="96" nowrap="" valign="top" style="width:72.15pt;border-top:none;border-left:none;border-bottom:solid #7F7F7F 1.0pt;border-right:solid #7F7F7F 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:23.05pt">
<p class="MsoNormal" align="center" style="text-align:center"><b><span style="font-family:"Arial",sans-serif">2023<o:p></o:p></span></b></p>
</td>
<td width="96" nowrap="" valign="top" style="width:72.35pt;border-top:none;border-left:none;border-bottom:solid #7F7F7F 1.0pt;border-right:solid #7F7F7F 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:23.05pt">
<p class="MsoNormal" align="center" style="text-align:center"><b><span style="font-family:"Arial",sans-serif">2024<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="page-break-inside:avoid;height:23.05pt">
<td width="402" nowrap="" valign="top" style="width:301.35pt;border:solid #7F7F7F 1.0pt;border-top:none;padding:0in 5.4pt 0in 5.4pt;height:23.05pt">
<p class="MsoNormal"><span style="font-family:"Arial",sans-serif">Basic Disability only<o:p></o:p></span></p>
</td>
<td width="96" nowrap="" valign="top" style="width:72.15pt;border-top:none;border-left:none;border-bottom:solid #7F7F7F 1.0pt;border-right:solid #7F7F7F 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:23.05pt">
<p class="MsoNormal" align="center" style="text-align:center"><span style="font-family:"Arial",sans-serif">100%<o:p></o:p></span></p>
</td>
<td width="96" nowrap="" valign="top" style="width:72.35pt;border-top:none;border-left:none;border-bottom:solid #7F7F7F 1.0pt;border-right:solid #7F7F7F 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:23.05pt">
<p class="MsoNormal" align="center" style="text-align:center"><span style="font-family:"Arial",sans-serif">100%<o:p></o:p></span></p>
</td>
</tr>
<tr style="page-break-inside:avoid;height:23.05pt">
<td width="402" nowrap="" valign="top" style="width:301.35pt;border:solid #7F7F7F 1.0pt;border-top:none;padding:0in 5.4pt 0in 5.4pt;height:23.05pt">
<p class="MsoNormal"><span style="font-family:"Arial",sans-serif">Voluntary Short-Term Disability only<o:p></o:p></span></p>
</td>
<td width="96" nowrap="" valign="top" style="width:72.15pt;border-top:none;border-left:none;border-bottom:solid #7F7F7F 1.0pt;border-right:solid #7F7F7F 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:23.05pt">
<p class="MsoNormal" align="center" style="text-align:center"><span style="font-family:"Arial",sans-serif">0%<o:p></o:p></span></p>
</td>
<td width="96" nowrap="" valign="top" style="width:72.35pt;border-top:none;border-left:none;border-bottom:solid #7F7F7F 1.0pt;border-right:solid #7F7F7F 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:23.05pt">
<p class="MsoNormal" align="center" style="text-align:center"><span style="font-family:"Arial",sans-serif">0%<o:p></o:p></span></p>
</td>
</tr>
<tr style="page-break-inside:avoid;height:23.05pt">
<td width="402" valign="top" style="width:301.35pt;border:solid #7F7F7F 1.0pt;border-top:none;padding:0in 5.4pt 0in 5.4pt;height:23.05pt">
<p class="MsoNormal"><span style="font-family:"Arial",sans-serif">Basic and Voluntary Short-Term Disability (when combined into consolidated payments)<o:p></o:p></span></p>
</td>
<td width="96" nowrap="" valign="top" style="width:72.15pt;border-top:none;border-left:none;border-bottom:solid #7F7F7F 1.0pt;border-right:solid #7F7F7F 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:23.05pt">
<p class="MsoNormal" align="center" style="text-align:center"><span style="font-family:"Arial",sans-serif">16.84%<o:p></o:p></span></p>
</td>
<td width="96" nowrap="" valign="top" style="width:72.35pt;border-top:none;border-left:none;border-bottom:solid #7F7F7F 1.0pt;border-right:solid #7F7F7F 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:23.05pt">
<p class="MsoNormal" align="center" style="text-align:center"><span style="font-family:"Arial",sans-serif">15.78%<o:p></o:p></span></p>
</td>
</tr>
<tr style="page-break-inside:avoid;height:23.05pt">
<td width="402" valign="top" style="width:301.35pt;border:solid #7F7F7F 1.0pt;border-top:none;padding:0in 5.4pt 0in 5.4pt;height:23.05pt">
<p class="MsoNormal"><span style="font-family:"Arial",sans-serif">Voluntary Long-Term Disability only<o:p></o:p></span></p>
</td>
<td width="96" nowrap="" valign="top" style="width:72.15pt;border-top:none;border-left:none;border-bottom:solid #7F7F7F 1.0pt;border-right:solid #7F7F7F 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:23.05pt">
<p class="MsoNormal" align="center" style="text-align:center"><span style="font-family:"Arial",sans-serif">0%<o:p></o:p></span></p>
</td>
<td width="96" nowrap="" valign="top" style="width:72.35pt;border-top:none;border-left:none;border-bottom:solid #7F7F7F 1.0pt;border-right:solid #7F7F7F 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:23.05pt">
<p class="MsoNormal" align="center" style="text-align:center"><span style="font-family:"Arial",sans-serif">0%<o:p></o:p></span></p>
</td>
</tr>
</tbody>
</table>
</div>
<p class="MsoNormal"><span lang="EN" style="font-family:"Arial",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN" style="font-family:"Arial",sans-serif">For employee questions about taxes withheld from their disability benefit payments, please advise employees to contact their LFG case manager by phone or email.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:9.0pt"><o:p> </o:p></span></p>
</div>
</body>
</html>