jfricketts
Sep 26 2009, 05:07 PM
Seeking input on others experiences with companies applying FICA and Medicare taxes to non-qualified plan distributions upon retirement. My non-qualified plan was fully funded 13 years ago when my prior employer was acquired by a major conglomerate. Now the new owner indicates that FICA and Medicare taxes are deductible from any future distributions of the plan. The statutory tax rates (7.65% and 1.45%) are being applied to the present value of the future payment stream to calculate the tax liability. This catch up (13 years after the fact) for taxes normally due when the income was earned seems incorrect. Note that for some 30+ years, I annually maxed out on the FICA tax liability. Also, the full amount was paid for the Medicare portion on gross income in each year. Thanks in advance for input on your experiences with this type of issue.