|Members Retirees Employers|
Federal tax law permits employers to pick up employee retirement contributions. This is governed by federal tax law. There are no Ohio statutes or SERS rules governing the implementation of a pick-up plan of mandatory employee contributions.[Read More...]
Under a pick-up plan, the employer picked-up employee contributions are:
In order to implement a pick-up plan, federal tax law requires an employer to adopt a written plan that specifies the following:
There are two methods of pick-up plans: salary reduction and fringe benefit. An employer also may use a combination of these methods.
A fringe benefit plan also may be referred to as an offset against future salary increases, in lieu of salary increases or board paid.
If you have more questions, contact your tax advisor.[Hide]
After an employer adopts a pick-up plan in accordance with federal tax law, notice must be provided to SERS on a Notice of Employer Pick-up Plan (Form 15.51).[Read More...]
Under current IRS Rulings, employee contributions to SERS may be picked up by the employer and excluded from the employees’ gross income for federal income tax purposes.[Read More...]
School districts have adopted three types of pick-up plans.[Hide]
Contributions are still deducted from employees’ salaries, but are deferred for federal and state income tax purposes. Contributions must be reported as tax deferred on monthly reports.[Read More...]
Under a Board paid pick-up plan, the contributions are paid by the employer out of the employer’s funds. The contribution is not deducted from employees’ salary.
Contributions must be reported as tax deferred on monthly reports.[Read More...]
The third type of plan is often called the pickup on a pick-up. Contributions are paid by the employer, and an additional contribution on the 10% is also paid. The pick-up on the pickup provides for a higher salary for retirement purposes, which will influence the amount of pension.
Contributions must be reported as tax deferred.[Read More...]
There have been occasions when the district intended that the pick-up on the pick-up be implemented, but the correct contributions and earnings were not reported. It is essential that
The Board of Education should adopt a resolution specifying the type of pick-up plan, the group
Employers are advised to check with the IRS for a determination of the legality of a local pick-up
In accordance with IRS regulations, SERS has set up the following requirements for implementation of a pick-up plan:
The System credits contributions picked up to the individual member accounts, and the amounts are included in the accumulated contributions of each member. These contributions are refundable to the employee upon termination and will be reported to the IRS.