MMC Benefits Handbook
FICA Tax on Plan Payments
In order to satisfy the FICA obligations with respect to a 409A BEP Benefit, your 409A BEP Benefit will be distributed as follows:
  • When you separate from service, the Program will make a single sum distribution of a portion of your 409A BEP Benefit, to satisfy the FICA tax obligation on the portion of the 409A BEP Benefit that has been triggered for payment by the separation event as well as income tax on the portion of your 409A benefit distributed to satisfy the entire FICA tax obligation. These FICA and income tax amounts will be remitted to the appropriate tax authorities. No further FICA tax will be due on the portion of your 409A BEP Benefit that was triggered for payment by the separation event.
  • At the time when the 409A BEP Benefit commences, the monthly payment amount will be reduced to take into account the single sum distribution made at your Separation from Service to satisfy the FICA tax obligations as well as the income tax withholding on that amount.