3121 Plan
Plan Overview
Who Is Offering The San Diego County Schools FBC 3121 Plan?
It is a partnership between San Diego County Board of Education Fringe Benefits Consortium and SchoolsFirst FCU.
What Is The San Diego County Schools FBC 3121 Plan?
The 3121 Plan is a savings program for employees who are not eligible to participate in the State Employees’ Retirement System.
What is the 3121 FICA Alternative Plan?
The Omnibus Budget Reconciliation Act of 1990 (OBRA) Amended the Internal Revenue Code and the Social Security Act to include employees of state and local governments. The Act authorized the Secretary of the Treasury to adopt regulations and provide guidance to the Internal Revenue Service and Social Security Administration. The Act amended Internal Revenue Code Section 3121, under which Social Security participation became mandatory for all employers.
However, the Internal Revenue Code Section 3121 says that part-time, temporary, and seasonal (PTS) employees are exempt from the Social Security tax if they are provided a “comparable retirement system”. In response, the 3121 Plan was created as an authorized alternative to Social Security to meet those requirements.
Who is Eligible for the 3121 FICA Alternative Plan?
Part-time, temporary, and seasonal (PTS) employees that are not eligible for CalPERS/CalSTRS participate in the 3121 FICA Alternative Plan.
Can I Choose Not to Participate in the 3121 FICA Alternative Plan?
No. If your district adopts the plan, you must participate in this plan.
What is the Mandatory Contribution to the 3121 FICA Alternative Plan for an Eligible Employee?
Without the 3121 FICA Alternative Plan, the employee must pay 6.2% after-tax into Social Security and the employer must also contribute 6.2% of pay. However, with the 3121 FICA Alternative Plan, the employee may be required to contribute up to 7.5% pre-tax (instead of 6.2% after tax) of gross compensation. The district may choose to contribute a portion of the required 7.5%.
Benefits of the 3121 FICA Alternative Plan
- Mandatory pre-tax contributions, which may reduce the amount of your current income which is
- subject to tax
- Possible District contributions to your account
- Tax-deferred savings, which means you pay no taxes on your investment earnings as long as they remain
- in the Plan
- Interest earnings are credited to employee
- 24/7 access to account info by accessing the SchoolsFirst Plan Vue Website
- Annual statement mailed to your residence
- Money available to withdraw upon termination ($10 one-time distribution fee)
- If you change jobs, you may be eligible to retain your funds in the plan until you request a withdrawal
- No 10% premature distribution tax
- Rollover/Transfer options
- 100% vested in account
For Information Regarding the FICA Alternative Plan Contact
SchoolsFirst Plan Administration
Phone: (800) 462-8328 ext. 4727
Fax: (714) 258-4262
Email: rpa@schoolsfirstfcu.org
Please do not email distribution, beneficiary, or enrollment forms.