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FICA Replacement Plan


30Rock
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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??

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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".

William C. Presson, ERPA, QPA, QKA
bill.presson@gmail.com
C 205.994.4070
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