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Flexible Retirement Solutions

Could a FICA Altternative Plan help your team?

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Flexible Retirement Solutions

FICA Alternative Plans provide certain public sector employers with an alternative to Social Security participation that supports employee retirement savings and district workforce planning.

These plans use a payroll-based structure that directs contributions into individual retirement accounts, where they are invested over time to help employees build long term retirement savings.

How Do FICA Alt Plans Work?

Rather than the standard 6.2% Social Security tax deduction, employees contribute a pre-tax percentage (typically around 7.5%) to their individual retirement accounts under the FICA Alternative Plan. These contributions are invested over time, with the potential to grow through earnings. Employees can access their funds upon termination of employment, disability, death, or reaching normal retirement age.

This approach offers employees a valuable opportunity to build their retirement savings, while also enabling school districts to reduce payroll taxes for part-time employees, such as substitutes and seasonal workers. This flexible solution helps manage costs without compromising the benefits available to the workforce.​

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