Social Security payroll taxes are collected under authority of the Federal Insurance Contributions Act (FICA). Social Security is currently withheld at 6.2% of eligible wages and matched by the university. Participants (adjunct and temporary employees) in this plan will no longer contribute to the Social Security Administration nor will the amount contributed by the employee be matched by the university. Instead, employees will contribute 7.5% of their wages into an investment account in their name. Medicare contributions at 1.45% will continue to be withheld and matched by the employer. The plan is mandatory for eligible employees and employees will be automatically enrolled or un-enrolled based on their salary plan status during the affected pay period. There is no minimum age or service requirement.
Withdrawals from your account may be made in a lump-sum cash payment (the IRS 10% penalty on early withdrawals does not apply to withdrawals upon separation at age 55 or later) or plan balances may be rolled over to an IRA or other eligible retirement plan. No IRS penalty applies to these transfers.
WHO IS NOT ELIGIBLE?
Faculty, Administrative Managerial Professional-AMP, and Support Personnel-SP employees participating in a university retirement plan are excluded from the FICA Alternative Plan. Also excluded are students, graduate assistants, fellows, phased retirees, rehired retirees, and any employees covered by current university retirement plans.
ADVANTAGES OF THE PLAN
Participating employees are not subject to Social Security taxes while covered by this plan, and Social Security taxes are never due on these funds.
Any benefits previously earned under another retirement plan (including Social Security) will not be reduced by participation in this plan.
Contributions to this plan are pre-tax. Therefore, the total amount of taxes paid will be reduced. No taxes are paid on the contributions until they are withdrawn.
The account balance is portable and there are no administrative fees.
| || Without Plan || With Plan |
|Earnings ||$1,000.00 ||$1,000.00 |
|Less 7.5% Plan ||0.00 ||75.00 |
|Taxable Income || 1,000.00 ||925.00 |
|Less 15% Income Tax ||150.00 ||138.75 |
|Less 6.2% Social Security * ||62.00 ||0.00 |
|Less 1.45% Medicare ||14.50 ||14.50 |
|Net Take-Home Pay ||$773.50 ||$771.75 |
|Accumulated Savings || ||75.00 |
|Net-Pay + Savings || ||$846.75 |
|*Note that SS is after tax |
TIAA-CREF and university representatives will be providing educational sessions regarding this plan. You are encouraged to attend. They will be provided on the following dates:
|DATE ||DAY ||CAMPUS ||LOCATION ||TIMES |
|June 27 ||Tuesday ||MacArthur ||SR 258 ||10:00, Noon, 2:00 |
|June 28 ||Wednesday ||MacArthur ||SR 258 ||10:00, Noon, 2:00 |
|June 29 ||Thursday ||Treasure Coast ||CO 141 ||10:00, Noon, 2:00 |
|July 11 ||Tuesday ||Boca Raton ||GS 108 ||10:00, Noon, 2:00 |
|July 12 ||Wednesday ||Davie ||LA 132 ||10:00, Noon, 2:00 |
|July 13 ||Thursday ||MacArthur ||SR 258 ||10:00, Noon, 2:00 |
|August 29 ||Tuesday ||Boca Raton ||BOT Room ||10:00, Noon, 2:00 |
|August 30 ||Wednesday ||Ft. Lauderdale ||HE 914 ||10:00, Noon, 2:00 |
|Night Sessions |
|August 29 ||Tuesday ||Boca Raton ||GN 102 ||5:30 pm |
|August 30 ||Wednesday ||Ft. Lauderdale ||HE 1110AB ||5:30 pm |
|August 31 ||Thursday ||MacArthur ||SR 108 ||5:30 pm |
FREQUENTLY ASKED QUESTIONS
How will I be enrolled?
Employees will be enrolled automatically if they are in an eligible Temporary (OPS) salary plan.
What happens if my salary status changes and I am no longer eligible? Will I need to take an action?
No. Employees will be enrolled or un-enrolled automatically based on their current salary plan status. The university will check for changes in salary plan status each biweekly pay period.
May I decide not to participate in the FICA Alternative Plan?
No. The IRS regulations for the 403 (b) plan require that all eligible employees participate for the agency to participate. Therefore, if you are in an eligible Temporary salary plan, participation is mandatory.
What if I do not complete the enrollment form?
The enrollment form designates your investment choice and a beneficiary. If an investment choice is not selected, the contributions will be invested in the fixed account, of 3.75%, guaranteed through December 31, 2006.
Can I continue to contribute to the plan after I leave the University?
No, the plan requires contributions through the organization. If you begin working for another institution that has a similar plan with TIAA-CREF, then you may begin contributions through that organization.
Will participation in the plan effect my past contributions to social security?
No, those contributions will remain in your name with social security.
If I am currently receiving social security benefits, can I still participate in the plan?
Yes, but it depends on the circumstances. For example, if you are currently paying FICA from your university wages and are in an eligible Temporary salary plan, you may participate.
How often will contributions be taken?
Each biweekly pay period.
How much are the contributions to the plan?
7.5% of pre-tax wages
Can I contribute more than 7.5% into the plan?
7.5% percent is the minimum required for the plan. At this time, that will be the contribution for all employees. The university will consider options for increasing contributions in the future.
Is there a charge from TIAA-CREF to establish an account, switch between investment plans, or to withdraw funds?
No, there are no charges from TIAA-CREF. There are some small fees associated with the mutual fund options. See the fee schedule above.
Will I still be able to participate in the plan if I move from Temporary to a SP, AMP or Faculty position?
No, these positions are eligible for other retirement plans.
Will I be able to withdraw my funds if I move from an Temporary to a SP, AMP or Faculty position?
Yes. The university will treat the employee as if they separated from the institution and were rehired.
If I do not currently pay FICA but am on a Temporary appointment, can I participate in the plan?
No. You must be currently paying FICA to participate in the FICA Alternative Plan.
Are student assistants or graduate assistants eligible?
No. They are FICA exempt and are not eligible.
How do I access my account with TIAA-CREF?
By logging on to the TIAA-CREF website: http://www.tiaa-cref.org
How can I determine the impact on my wages, with and without the FICA Alternative Plan?
See the sample spreadsheet calculation. (You must have Microsoft Excel.)
How and when can I withdraw funds from my account?
Upon termination of employment, contact your TIAA-CREF representative at 1-800-842-2776. (M-F 8 am - 10 pm)
What if my address or other contact information changes?
Address or contact information can be changed on the TIAA-CREF website
Can I send my 7.5% contribution to another plan (such as Valic or Gabor)?
No, but you may roll the invested funds over into one of these plans when you separate from the university.
What if I have multiple jobs with the university and only some of the jobs are eligible for the FICA Alternative Plan?
All jobs must be eligible for the employee to participate in the plan.