754-7 RETIREMENT FUNDS
Retirement funds are annuities or work-related plans for providing income when employment ends. They include such items as pension, disability, or deferred compensation plans administered by an employer or union. They also include funds held in individual retirement accounts (IRA) and plans for self-employed persons, sometimes called Keogh plans.
Retirement funds fall into two general categories:
754-7 A. RETIREMENT SAVINGS ACCOUNTS
Retirement savings accounts are individually owned, and money may be deposited and withdrawn at will. These funds are available, countable resources regardless of an individual's employment status. These accounts include:
Pension plans (including PERS and SBS ) that are established by an employer are exempt while the individual is employed with the employer. These types of plans include:
Availability of Pension Plan Funds:
If an individual is no longer working for the employer who established the pension plan, and is not yet eligible for periodic payments from the plan, it is an available, countable resource if the individual has the option of withdrawing the money as a lump sum.
When the funds in a pension plan cannot be immediately withdrawn and used to meet the needs of the family, the account balance is considered unavailable and not countable if:
If the individual is eligible for periodic payments from a pension plan, the individual must apply for such payments under development of income requirements. In this situation, the account balance is not a resource, but the periodic payments are counted as income.
If an individual refuses or fails to make a reasonable effort to secure these funds, either as a lump sum or as periodic payments, they are considered available and countable.
754-7 C. DEFERRED COMPENSATION PLANS
Deferred compensation plans are evaluated based on whether the individual can access the funds while still employed with the employer that established the account.
If the individual can access the funds while still employed, the deferred compensation plan considered available and countable.
For other deferred compensation plans, such as the one offered by the State of Alaska, the individual may not withdraw the funds while still employed. Such plans are treated as pension plans.
If an individual is no longer working for the employer who established the deferred compensation plan, it is an available, countable resource.
754-7 D. VALUE OF RETIREMENT FUNDS
The value of any retirement fund is the account balance minus any expected penalties or fees for withdrawal.
Previous Section | ||
MC #9 (07/03) |