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FICA Alternative Plan

What is a 457(b) FICA Alternative Plan?
The Omnibus Budget Reconciliation Act of 1990 (OBRA 90) mandates that employees of public agencies, including school districts who are not members of the employer’s existing retirement system as of January 1, 1992 be covered under Social Security or a qualifying alternate plan. The ESC Region 10 457(b) FICA Alternative Plan satisfies federal requirements and provides substantial cost savings compared to Social Security.

Contributions
Social Security requires that the equivalent of 12.4% of an employee’s salary be contributed each month (6.2% employee, 6.2% employer). However, the FICA Alternative Plan requires only a 7.5% contribution to a retirement account. The deferrals are made on a “pretax” basis, unlike Social Security, which are made on an “after-tax” basis.

Distributions
Employees or their beneficiares will receive the FICA Alternative Plan account balance when an employee eligibility is met for any of the following reasons:

  • Termination of Employment
  • Permanent and Total Disability
  • Death
  • Retirement

Changed employment status to a position covered by another retirement system (e.g., TRS) Note: If there have been no contributions to the account for two (2) years and the account balance is less than $5,000, the employee may be able to request a distribution.

Designating a Beneficiary
If the employee dies while a participant in the Plan, the account balance will be distributed to the employee’s beneficiary. If the employee is married at the time of death, the spouse is automatically the beneficiary. If the employee wishes to designate someone other than the spouse as beneficiary, the employee must do so in writing and the spouse must sign a spousal consent form. If the employee is unmarried at the time of death, the account balance will be paid to the employee’s estate unless another beneficiary has been designated. To designate a beneficiary, please login to your account at www.region10rams.org using the instructions under “Account Access” below.

Account Access
To review your account balance or request a distribution, you can access your account on the Region 10 RAMS website. Please follow the steps below to access your account:

  1. Visit www.region10rams.org
  2. Click the Login button in the upper right-handcorner
  3. Use the following credentials to access your account:
    • User Name: Your Social Security Number (no spaces or dashes)
    • Password: Your date of birth (MMDDYYYY)
    • Done! You should now have full access to your account