3121 FICA Alternative Savings Plan
FICA Savings Account for your Part time Employees:
Pelion Benefits is pleased to describe our program that allows qualified governmental entities a cost effective method of providing an alternative to social security coverage for Part-time, Seasonal and Temporary employees.
Savings for You and Your Employees:
Here is how it works. Instead of reducing the employee’s gross wage by the mandatory FICA 6.20% tax contribution and sending it to the federal government, the employer establishes an account which the employee contributes 7.50% of gross wage on a pre-tax basis.
Since the 7.50% pre-tax contribution has equivalent impact as the 6.20% after-tax contributions to Social Security, the net paycheck of the employee participant remains stable. Also, the employee accrues an account that can be utilized immediately at termination of employment. Account balances are available for review by the employee on the Internet at all times.
The Employer saves the entire 6.20% matching Social Security portion of the total part time employee payroll.
The Participant earns funds in a Guaranteed Fixed Interest account, free from loads and surrender charges, and has personal access to the funds immediately up termination of employment, death or disability, or reaching normal retirement age.
Any growth your employees’ money realizes in the plan is tax-deferred until they make withdrawals from their account. And if the plan is funded using a benefit-sensitive group contract, employees will have immediate access to all or part of their account through withdrawals and loans without any surrender charges.
A Broad Range of Investment Options
During the accrual stage, while an employee is employed, all funds earn a fixed interest rate.
At retirement, each employee has unique investment objectives. To meet their individual financial goals, your investment advisor offers investment options from well-known fund managers that may include guaranteed fixed interest accounts, conservative and moderate investment options, and also aggressive growth funds. If your employees’ investment objectives change, they can reallocate their money among the investment options at no cost and tax-free. This gives your employees the options they need to build a dependable, personalized investment program.
Complete Administration at No Cost to You
Once you adopt the 3121 FICA Alternative Plan, all administration – employee contributions, asset allocation, financial statements, loan processing, and more – is provided by Pelion Benefits, at no cost to you. The fees are usually fully paid under terms of the Annuity Contract.
Pelion Benefits has been furnishing professional, timely qualified employee benefit plan administration since 1981. The only time you might incur a cost would be if you shifted the entire plan to another investment custodian, and surrender charges are assessed.
A Special Array of Benefits:
Defers Federal, State, and Local Income Taxes
No FICA Matching Contributions
Complete Plan Administration at No Cost
No Worrying about IRS Compliance
Mandatory Employee Participation
Immediate Employee Access to Funds on Internet
No Surrender Charges for Employees unless Contract is surrendered.
Investment Options from Leading Fund Managers
Retiring Employees have Access to Advisor
For Further Information:
If you are interested in exploring how the 3121 FICA Alternative Plan could benefit your organization, contact your representative today. He or she will be happy to provide you with all the information and material you will need to implement this program.