Terminal Pay/Benefits Plan, Full-Time Employees
This program helps retiring or voluntarily terminating full-time employees avoid paying some taxes and defer the payment of other taxes on money paid for sick and annual leave payouts. See Board Policy 6.15 - Terminal Pay.
- When a full-time employee retires or voluntarily terminates, payment made for accrued sick and annual leave will be deposited into an annuity account in the name of the employee. A minimum threshold amount of $2,000 will be required to trigger this deposit. The deposit made on behalf of the employee begins to earn interest as soon as it is deposited to the individual’s annuity account.
- The deposit to the annuity is made pre-tax. No deduction is made for Social Security, Medicare, or withholding (income tax). The employee’s Social Security and Medicare contributions on these payments are permanently avoided.
The employee pays income taxes when the funds are withdrawn from the account. The interest earnings are also tax-deferred, and income taxes are not due on the principal or interest until money is withdrawn from the account. Bencor Inc. administers the plan. For more information, visit inside.cf.edu, Employee Benefits, and select Bencor Special Pay Plan or contact the coordinator of benefits and special projects at 352-854-2322, ext. 1290.
Retirement and Social Security Contributions
Effective July 1, 2011, the law requires all Florida Retirement System (FRS) Investment Plan and Pension Plan members to make a 3 percent employee contribution on a pretax basis. In addition to the 3 percent employee contribution, the college contributes a portion of the FRS benefit on your behalf.
Part-time employees become eligible to participate in the Florida Retirement System once they have worked 2,080 hours in an FRS covered position.
The college also pays a Social Security contribution, which is currently set at 6.2 percent of an employee’s salary. This amount matches the employee’s contribution.
All persons hired on and after April 1, 1986, are required by the federal government to make Medicare payments. This is automatically included as part of the Social Security coverage. Those employees who do not normally come under the college’s Social Security agreement (temporary employees, e.g., continuing education instructors, tutors, substitutes) must also have this Medicare coverage deducted from their pay. The cost is currently set at 1.45 percent of the salary. This amount matches the employee’s contribution.
Additional Medicare Tax applies to an individual’s Medicare wages that exceed a threshold amount based on the taxpayer’s filing status. An Additional Medicare Tax of 0.9% must be withheld on an individual’s wages paid in excess of $200,000 in a calendar year, without regard to filing status. There is no employer match for Additional Medicare Tax.
Tax-Sheltered Annuity Programs
All employees are eligible to participate in the Tax-Sheltered Annuity (TSA) program. Employees may choose to invest money into a variety of 403(b) and 457(b) options on a voluntary pre-tax basis as a payroll deduction. TSAs are offered to employees through companies authorized to solicit on campus: Horace Mann Companies, VOYA, Oppenheimer Funds, Metropolitan Life, TIAA, and Corebridge Financial (formerlyAIG Retirement Services. Contact information for the approved companies can be located at Inside.CF.edu, Employee Benefits, under Tax Sheltered Annuities.
TSA Consulting Group (TSACG) is the third-party administrator that manages all transaction requests on behalf of CF. TSACG is responsible for the approval of items such as distributions, exchanges, transfers, loans and rollovers. Contact information for TSACG can be located at https://benefits.cf.edu under Tax Sheltered Annuities.
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