U Retirement Funds

Revised 10/01/2024

Policy

The value of a retirement fund, pension plan or pension annuity is a countable resource in the amount available for withdrawal.

The value of the fund counts as a resource from the first month the money in the fund is available for withdrawal. This applies even if the withdrawal is delayed for reasons beyond the customer’s control, like an organization’s processing time.

Determine whether the customer is eligible for defined periodic benefit payments (pension) or a lump-sum withdrawal. Use the table below to determine treatment of the retirement fund.

 

If the retirement fund is...	Then treat the fund as...
Partially or fully available for withdrawal	A countable resource for the amount available less any fees and loans that must be paid to get the funds. NOTE     The taxes due are not subtracted from the available balance until which time the taxes are paid (usually upon withdrawal).
Available as a defined periodic benefit payment. Available as a lump sum or a defined periodic benefit payment.	An income stream when the customer is receiving payments. See MA606TT for details. A transfer when the customer elects the lump sum. See MA902E for details.
Is not available because the customer: Must end employment to access the funds Has not contributed and is not vested in the employer’s contributions Cannot legally access the funds Has not reached the retirement age or criteria that makes the funds available Only has access to the funds as a loan Only has access for specific purchases or payments which cannot be used for the customer’s support or maintenance. For example: education, medical bills, or a down payment on a home	Not a countable resource.
Converted to an irrevocable annuity or income stream	Not a countable resource. See MA902G for treatment of the transfer.
Unavailable and becomes available	A countable resource in the month following the month the fund became available.

 

Definitions

Term	Definition
Defined Benefit Retirement Plan	Also known as a pension plan. The employer guarantees a specific benefit or payout upon retirement.
Pension	Benefit payments based on a person’s past employment including age, years of service or disability.
Periodic Retirement Benefits	Benefit payments made to a person at a regular interval (often monthly) due to entitlement to retirement benefits based on a defined benefit retirement plan.
Retirement Funds	Annuities or work-related plans for providing income when employment ends. This includes funds administered by an employer or union, as well as individual retirement accounts (IRAs) and Keough accounts.

 

Proof

Proof of a retirement fund’s value includes:

• Letter from the payor;

• Pay stub;

• Collateral contact with the fund administrator;

• Written statement from the Office of Personnel Management, Retirement Operations Center (federal pensions);

• Letter from the service branch of DFAS (military retirement); or

• Award letter.

 

The proof must contain the following:

• Name of the fund owner;

• Name and address of the fund administrator;

• Terms and conditions of the fund, including the conditions for withdrawal; and

• Amount currently available.

NOTE     The Request for Proof of Unearned Income (DE-207) form may be used to verify that the fund is paying periodic benefits and is excluded as a resource.

 

Legal Authority

Program	Legal Authority
ALTCS	20 CFR 416.1201(a) and (b)