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Old 10-17-2016, 09:16 PM
DiscreteAndDiscreet DiscreteAndDiscreet is offline
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Originally Posted by StillCrazed View Post
Under the Section 218 rules for CalPERS, I note this language "Certain services and positions can be excluded from Social Security coverage under the Section 218 Agreement, if requested by the state. Exclusions are limited to the services listed as optional exclusions in Section 218 of the Social Security Act. Those optional exclusions include:

Agricultural labor, but only those services that would be excluded if performed for a private employer
Elective positions
Election workers and election officials whose pay in a calendar year is less than the amount mandated by law, unless Section 218 agreement covers election workers
Part-time positions (as defined by the employer in terms of hours per week/month/year)
Positions compensated solely by fees that are subject to Self-Employment Contributions Act (SECA), unless Section 218 Agreement covers these services
Students enrolled and regularly attending classes at the school, college, or university where they are working"
So, is CalPERS required to offer a replacement for SS to those excluded (especially part-timers)?
First, standard internet disclaimer: I am not a lawyer.

I've never encountered a situation with a group that is not covered by Social Security or a public sector pension plan, but as I understand it, that possibility exists for the Section 218 exclusion classes, which as you noted, are operative for CalPERS.

Legally, what this means is that state governments were allowed to define categories of part-time employment not subject to a retirement mandate. I also understand that 218 agreements are said to be irrevocable after 1983. I'm not sure what these two facts mean together. I'm not sure if they are free to add any retirement plan to this employment with no other repercussions, or if they would have to make this a Social Security replacement plan or else the compensation would be subject to newly imposed FICA withholdings.

If it's required to be a Social Security replacement plan, it can't be opt out, and someone has to pay a 7.5% contribution rate (either the employer or the employee or some combination).
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