Social Security / Medicare Payments Reimbursement Program
ARTICLE I – Purpose
1.1 Some Employees of Los Alamos National Security, LLC (“LANS”) who were previously employees of the University of California at Los Alamos National Laboratory (“LANL”) were not required to pay Social Security/Medicare taxes on compensation from LANL, but are now required to pay Social Security/ Medicare taxes on compensation from LANS. Because of the number of years some of these employees worked for LANL, it is likely they will never be eligible for Social Security benefits. This program is designed to reimburse such Social Security/Medicare tax deductions to those LANL employees who elected TCP 1, began paying Social Security/Medicare taxes as a LANS employee upon their transition to LANS employment on June 1, 2006, and who subsequently attain age 65 without having earned entitlement to Social Security benefits.
ARTICLE II – Program Eligibility
2.1 LANS will refund an amount equal to the Social Security/Medicare taxes withheld from the pay of any LANS employee (including a former LANS employee) who:
(a) Opted out of Social Security while employed by UC/LANL, elected TCP 1 and transitioned from UC/LANL to LANS employment effective June 1, 2006;
(b) Began paying Social Security/Medicare taxes due to such transition to LANS employment;
(c) Meets the minimum requirements to receive a retirement benefit under TCP 1;
(d) Is not eligible for Social Security benefits upon attainment of age 65, whether or not employed by LANS on such date, because he/she did not earn enough Social Security credits for Social Security benefits and provides documentation from the Social Security Administration that he/she is ineligible for Social Security benefits; and
(e) Provides annual documentation thereafter from the Social Security Administration that he/she continues to be ineligible for Social Security benefits because of the insufficient number of Social Security credits.
ARTICLE III – Applying For Reimbursement
3.1 To receive reimbursement payments under this program, an eligible LANS employee or former employee must:
(a) Within 90 days after attaining age 65, provide LANS with an original of his/her annual Social Security Statement dated within 90 days of his/her 65th birthday indicating he/she is not eligible for Social Security benefits because of insufficient Social Security credits.
(b) Within 90 days of each birthday thereafter, provide LANS with an original of his/her Social Security Statement dated within 90 days of that birthday indicating continuing ineligibility for Social Security benefits due to insufficient Social Security credits.
ARTICLE IV – Reimbursement Determination and Payment
4.1 If the eligible employee has timely provided the employee’s latest Social Security Statement indicating ineligibility for Social Security benefits based on insufficient credits, the reimbursement for that year will be paid on the 120th day following the eligible employee’s birthday (if this day does not fall on a business day, then payment will be made on the next business day) .
4.2 The annual reimbursement amount will be equal to the total Social Security/Medicare tax withholding for the employee during active employment with LANS as shown on the employee’s W-2 forms during the employee’s employment with LANS, divided by the number of complete months of active employment with LANS until age 65, multiplied by 12. The first payment will be prorated based on the number of complete calendar months remaining in the calendar year after the employee’s attainment of age 65. The last annual payment will be prorated based on the remaining balance due to the employee at that time. The annual reimbursement payments will not include interest on any withheld amounts.
4.3 For employees who are active employees at age 65 and continue to have Social Security/Medicare tax withholding from LANS compensation after reaching age 65, an additional reimbursement payment will be included in the annual reimbursement payment scheduled to be made in accordance with paragraphs 4.1 and 4.2 in the year following the year in which the employee reaches age 65 if all other requirements for eligibility to receive the annual reimbursement payments in Article II are met. The amount of the additional reimbursement payment for that year, shall be equal to the total Social Security/Medicare tax withheld by LANS from the employee’s pay for the prior year pay periods beginning after the employee reaches age 65. In subsequent years, the amount of any additional reimbursement based on working past age 65 and having the Social Security/Medicare tax withheld from pay shall be equal to the amount of such withholding in the prior year and shall be included in the annual reimbursement payment scheduled to be made that year or if no further annual reimbursement payments are scheduled, on the date such reimbursement payment would have occurred. The additional annual reimbursement payments will not include interest on any withheld amounts.
EXAMPLE 1: The total Social Security/Medicare withholdings for an employee who is not an active employee was $8,750 dollars from June 1, 2006 until attainment of age 65 on April 30, 2009 (35 months). If the employee provides the required documentation annually, the annual amount of benefit is calculated as $8,750/35 months x 12 = $3,000 annual payment.
LANS will pay the employee the first annual reimbursement payment on August 28, 2009. A payment of $2,000 would be made to the employee (8/12 x $3,000 = $2,000);
The next annual reimbursement payment of $3,000 will be made on August 30, 2010 (full year for 2010);
Another $3,000 annual reimbursement payment will be made on August 29, 2011 (full year for 2011); and
A final annual reimbursement payment of $750 will be made on August 28, 2012 (the remaining balance).
EXAMPLE 2: Same as Example 1, except the employee is still an active employee and continues to work until April 30, 2010. From May 1, 2009 through December 31, 2009, $2,000 of Social Security/Medicare taxes are withheld from his/her compensation, and between January 1, 2010 and April 30, 2010, $1,000 of Social Security/Medicare taxes are withheld from his/her compensation. If the employee meets all the eligibility requirements throughout this time, in addition to the reimbursement payments described in Example 1, additional annual reimbursement payments totaling $3,000 will be owed to the employee.
LANS will pay the employee the first additional annual reimbursement payment on August 30, 2010 in the amount of $2,000; and
The final payment of the additional annual reimbursement will be made on August 29, 2011 in the amount of $1,000.