FICA Replacement Plan

[30Rock]

We have a governmental 401 (a) plan with a 7.5% mandatory FICA replacement contribution, designed to be a 414() pick-up. Since the employee portion of the social security tax rate is being reduced by 2%, the employer wants to know if the mandatory pick up amount should also be reduced under the plan?

Any thoughts??

[Bill Presson]

We have a governmental 401 (a) plan with a 7.5% mandatory FICA replacement contribution, designed to be a 414() pick-up. Since the employee portion of the social security tax rate is being reduced by 2%, the employer wants to know if the mandatory pick up amount should also be reduced under the plan?

Any thoughts??

I don't think so, because the SS benefits aren't going to change. And only the Govt can keep the benefits the same while lowering "contributions".