Employees Who Are Not Members of a Pension Program

If you are not a City pension member and do not have a 401(k), ROTH 401(k), 403(b), or 457 Deferred Compensation Plan/Tax Deferred Annuity (DCP/TDA) or contribute less than 7.5% to your TDA, you are subject to Social Security and Medicare taxes. You are not subject to Social Security or Medicare tax if you meet these three requirements:

• You are not a member of a City pension system
• You contribute 7.5% or more of your compensation to a 401(k), ROTH 401(k), 403(b) or 457 DCP/TDA
• You have a City start date prior to April 1, 1986

You are not subject to Social Security but must pay Medicare tax if you meet these three requirements:

• You are not a member of a City pension system
• You contribute 7.5% or more of your compensation to a 401(k), 403(b), or 457 DCP/TDA
• You have a City start date on or after 4/1/86

You may enroll in a TDA/DCP at any time. If you are not a member of a City pension, you may substitute deferred compensation contributions for Social Security as long as you contribute at least 7.5% of your earnings to your TDA/DCP.
If you are a newly hired employee and enroll in a TDA/DCP plan with a rate equal to or greater than 7.5% during the first 30 days of City employment, you are entitled to a refund of moneys deducted for Social Security (but not Medicare) from the date of hire until the TDA/DCP contributions start.

Transferring Between Agencies

If you are transferring to another agency without a break in service, it is your responsibility to notify the TDA/DCP plan administrator of the transfer. Your new agency is required to withhold Social Security and Medicare until the contribution to the TDA/DCP plan is re-established.

The TDA/DCP administrator will notify OPA when the contribution is re-established. OPA will process a FICA refund for the amount withheld during the transfer period as long as you were exempt from Social Security at the previous agency.

If you are in this category, you cannot contribute to Social Security unless you lower your contribution to your TDA below 7.5% or join a pension. If you decide to pay into Social Security, your contributions to your TDA account must be less than 7.5% of your gross earnings and cannot exceed 7.5% of the wage base for the calendar year.

If you are in the above category and obtain civil service status, you are required to join a City pension. You will begin paying Social Security when you submit a pension application or six months after your civil service entry date, whichever is later.

Learn more about Pension Plans.

Find out about the Deferred Compensation Plans on OLR webiste.

Pension Members in 1957

If you are a City employee belonging to a City pension plan who elected not to have Social Security coverage in 1957 ("no voters") when the City joined the Social Security system, you are not subject to Social Security and Medicare.