Eligible employees are employees who do not currently participate in the Teachers Retirement System of Texas or the Optional Retirement Program, Work-Study Student Assistants and Retirees of the Teachers Retirement System of Texas or Optional Retirement Program. If you are subject to Social Security (FICA) participation, you will have to contribute 7.65 percent of your pay, up to the maximum contribution level. DCCCD will match – if you select the alternative model, there are no matching dollars.

FICA Alternative Retirement Plan Overview 

As an alternative, the DCCCD has elected and established a special retirement plan for its part-time and limited-service employees as an alternative to Social Security participation.  In July 1991, the DCCCD joined with approximately 20 other institutions in the State to offer this program called PERC - Program for Extra Retirement Compensation administered by Metropolitan Life Insurance Company.  The plan features:

OBRA ’90 requires that the PERC plan include a 7.5 percent contribution level established by the employer and employee contributions. Currently, the part-time employee contributes 7.5 oercebt on gross salary, before taxes. The interest level guaranteed minimum is no less than 3 percent with a maximum rate of 7.75 percent.

Unlike Social Security, with the PERC plan you would have access to the funds from your account upon retirement. There are numerous payout options available such as:

Interest is credited daily based on Metropolitan’s standard "retail" interest rates of refunds deposited during the same month that your deposit occurred. Interest accumulates on a tax-deferred basis. Your deposits and interest earnings grow on a tax-deferred basis. When the employee elects to receive funds, the employee are taxed.

Generally, withdrawals before age 59.5 results in an IRS imposed penalty (currently 20 percent excise tax). The employee receives a fund statement annually showing all of the activity on the account for the year. Statements are mailed to the home address.

When your individual account is established, it will remain in effect until you withdraw your funds or elect one of the retirement options. No annual service charge are assessed against your account unless it remains inactive for nine (9) consecutive months, at which point an annual service fee of $20 is charged against your account balance. You may avoid this charge by rolling your balance to an Individual Retirement Account (IRA). If you work one semester, then are gone for the next semester, and then return for a semester, your account remains active and free of service charges.

Social Security Overview

Social Security pays benefits when you retire, become disabled or die, if eligibility requirements are met. Your spouse and children may also be eligible for benefits when you become entitled. The employee and the employer pay 6.2 percent in taxes for Social Security and 1.45 oercebt for Medicare Hospital Insurance or 7.65 percent total FICA – Federal Insurance Contributions Act.

The contribution that the employee and employer pay each year based on the tax rate (percent of pay) and the amount of your earnings. Employees do not pay any Social Security tax on earnings over the Maximum Table Amount. There is no limit for Medicare. The Maximum Table Amount increases each year based on increases in the average wage. Social Security and Medicare taxes are not deductible for federal income taxes for employees, that means the deduction is an after tax or post tax deduction. If you work while receiving benefits, you may still pay Social Security and Medicare taxes on your earnings.

To qualify for retirement benefits, you are fully insured; that is you must have the required number of credits under Social Security. Most workers need 40 credits to qualify for retirement benefits – or about 10 years of work.

Specific questions concerning Social Security eligibility, qualifications and benefits should be addressed by the Social Security Administration.

Electing A Retirement Program

A part-time employee must elect to participate in Social Security or have earnings invested in the PERC-Program of Extra Retirement Compensation. Upon the first day of employment, the Location Human Resources office or Representative will provide you with a "DCCCD Part-Time Employee Retirement Agreement Form". The form requires verification of your eligibility to participate in the Program. If you are eligible to participate, the employee must make an election to participate in one of the Programs.

Election to the FICA Alternative Plan (PERC) requires the authorization to the DCCCD to reduce gross earnings by 7.5 percent until retirement eligibility changes or termination of employment, whichever comes first. All monies deposited and interest accrued are subject to all Laws and Internal Revenue codes, rules and regulations governing 403-B plans, Tax Shelter Annuities and/or deferred compensation. Employees are strongly encouraged to consult with a tax or financial advisor concerning implications for this type of deferred compensation, by cause or consequences incurred. This election is irrevocable without an approved change in employment status or retirement eligibility.

An election to Social Security/FICA option requires the DCCCD to deduct 7.65 percent post-tax from the employee’s earnings each pay period. As with the PERC Program, eligibility has to be established. All contributions are subject to the rules and regulations governing the Internal Revenue Service and the Social Security Administration. This election is irrevocable without an approved change in employment status or retirement eligibility.

Withdrawal Request

Monies deposited into the PERC Program can be withdrew at termination. The employee requests a "Metlife 403(b) Withdrawal Request Form", complete, and return to their Location Human Resources. The form forwarded to the District Human Resources for processing. The refund usually takes 4 to 8 weeks from the date of the request. Delays happen when the Location Human Resources office is unaware of your termination. Please resign from your Position before you request a withdrawal.

You cannot withdraw deposits from Social Security.

Rollovers/Transfer Request

Upon termination, the employee should request a "Metlife 403(b) Withdrawal Request Form". Section III – Income Tax Withholding under A. Eligible Roll-Over Distribution should be completed and returned to the Location Human Resources. Metlife forwards the form to the District Human Resources for processing. When Metlife receives the rollover request, they process the rollover directly with the receiving Institution. (Teachers Retirement System of Texas does not accept rollovers from this program. Most rollovers to an Optional Retirement Program are acceptable).

Social Security deposits are not rolled over or transferred.

Address Changes

Employee address changes should be made immediately with the Location Human Resources office.

Beneficiary Changes (PERC Program)

Upon your death, benefits are paid to your Spouse or to the Estate. If the employee wishes to designate a beneficiary other than the Spouse or their Estate, they should complete the Beneficiary Designation form and return it to the Location Human Resources office for processing. Call Metlife requesting Beneficiary Designation by calling Metlife at 1-800-560-5001.

To claim death benefits, the employee’s beneficiary must notify the Location or District Human Resources office. The "Metlife 403(b) Withdrawal Request Form" will be mailed to the Beneficiary for completion. The beneficiary must attach a certified copy of the death certificate. The form should be forwarded to the District Human Resources for processing. Benefits paid directly to the Beneficiary or to the Estate.