An employee enrolled in IRAP is required to make contributions to the Plan each active pay period through payroll deduction. Deductions are taken at a rate of 4.5% of gross compensation for all participants. The rates may be changed statutorily.
Gross compensation does not include:
- severance pay or early separation incentive pay;
- amounts paid in lieu of vacation;
- reimbursement amounts; or
- payments that are not a part of regular compensation.
Contributions are deducted from each paycheck on a pretax basis and deposited in the Plan. The contributions are subject to FICA and Medicare tax so participants' future Social Security benefits are not reduced by participation in the Plan.
