oldman Posted July 6, 2011 Report Share Posted July 6, 2011 We have a governmental 401 P/S FICA Alternative Plan with mandatory pick-up contributions of 7.5% of compensation. Plan wishes to allow participants to take distributions on account of a serious financial hardship. In order for an employer to avoid FICA tax liability, its FICA Alternative Plan must satisfy certain design and benefit requirements. A FICA Alternative Plan: -must provide a benefit of at least 7.5% of compensation; -contributions must be credited with a reasonable rate of interest; and -benefits must be 100% nonforfeitable In reviewing Treas. Reg. §31.3121(b)(7)-2 and IRS Publication 963, I was not able to determine if such distributions would be permitted under such an arrangement. Do you know of any reason why such distributions would not be allowed? Link to comment Share on other sites More sharing options...
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