Effective Date of the Plan
The University implemented the FICA Alternative Plan for the pay period beginning August 22, 2004.
Who is Eligible?
Enrollment in the plan is compulsory for all OPS non-student employees, including adjunct faculty.
Who is Not Eligible?
Faculty and staff employees participating in a university retirement plan are excluded from the FICA Alternative Plan. Also excluded are students, graduate assistants, phased retirees, and any employees covered by current university retirement plans.
How the Plan Works
Under the FGCU 401(a) FICA Alternative Plan participants contribute 7.5% of their compensation to an account in their name. Medicare contributions at 1.45% will continue to be withheld and matched by the employer.
The plan is funded with VALIC's Potentia Product. Initially, Plan contributions are automatically invested in the Potential General Account (i.e. guaranteed or fixed). Subsequently, participants can self direct among 19 investment choices administered by VALIC. To obtain a prospectus for the underlying funds, visit http://www.valic.com/_82_16911.html. The prospectus contains the investment objectives, risks, charges and expenses, and other information which you should consider carefully in order to make an informed investment decision.
Download the Enrollment/Beneficary Designation form [.pdf - 447kb]
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 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 No taxes are paid on the contributions until they are withdrawn.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.
Withdrawals from the plan may be made at the following times:
a. Termination of employment;
c. After age 70 ½ or retirement, if later, when the IRS requires minimum distributions
be made to the participant each year;
d. Participant's total disability; or
e. Participant's death.
If a. or b. above apply, distributions can be made to the participant 12 months after the date of separation from FGCU. 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 the Plan Administrator?
VALIC, a leader in tax-qualified retirement plans, is the administrator of the Plan. For more information regarding the FICA Alternative Plan, including investment options, contact VALIC at 1-800-448-2542. Individual account information is accessible on VALIC Online at www.aigvalic.com.