The U.S. Treasury Department announced it is ending the Payroll Savings Plan on January 31. TreasuryDirect said plan use started to decline in the 1980s and the decline continued as employees were offered access to §401(k) and employee stock option plans.
Through the program, employee direct deposit funds were used to purchase Payroll Certificates of Indebtedness (C of I). The Payroll C of I was then used to purchase savings bonds. Treasury said employees must contact their employer’s payroll office to have the payroll allotment/direct deposit stopped. User Guide 302 has more details.
Employees may redeem all or part of their Payroll C of I by going to ManageDirect and selecting the Redeem Securities text link. Just because employees redeem their payroll credits, it will not stop the payroll allotment/direct deposit. The payroll department will have to stop the allotment.
To learn more about federal and state laws, regulations, and information to keep your company's payroll operations in compliance, check out Payroll Source Plus!
Jyme Mariani, Esq., is Managing Editor of Payroll Currently and Senior Manager of Payroll Information Resources for PayrollOrg.
