TN 29 (07-90)

SI 01120.210 Retirement Funds

A. Definitions

1. Retirement Funds

Retirement funds are annuities or work- related plans for providing income when employment ends (e.g., pension,disability, or retirement plans administered by an employer or union). Other examples are funds held in an individual retirement account (IRA) and plans for self-employed individuals, sometimes referred to as Keogh plans. Also, depending on the requirements established by the employer, some profit sharing plans may qualify as retirement funds.

2. Periodic Retirement Benefits

Periodic retirement benefits are payments made to an individual at some regular interval (e.g., monthly) and which result from entitlement under a retirement fund.

3. Value of a Retirement Fund

The value of a retirement fund is the amount of money that an individual can currently withdraw from the fund. If there is a penalty for early withdrawal, the fund's value is the amount available to an individual after penalty deduction. However, any taxes due are not deductible in determining the fund's value.

B. Policy Principle

A retirement fund owned by an eligible individual is a resource if he/she has the option of withdrawing a lump sum even though he/she is not eligible for periodic payments. However, if the individual is eligible for periodic payments, the fund may not be a countable resource. See E.1. below if an individual is eligible for periodic payments.

A previously unavailable retirement fund is not income to its recipient when the fund becomes available. The fund is subject to resources counting rules in the month following the month in which it first becomes available.

C. Operating Policies

1. Termination of Employment

A retirement fund is not a resource if an individual must terminate employment in order to obtain any payment.

2. Fund Not Immediately Available

A resources determination for the month following that in which a retirement fund becomes available for withdrawal must include the fund's value. A delay in payment for reasons beyond the individual's control (e.g., an organization's processing time) does not mean that the fund is not a resource since the individual is legally able to obtain the money. It is a nonliquid resource.

3. Claim For Periodic Payment Denied

If an individual receives a denial on a claim for periodic retirement payments but can withdraw the funds in a lump sum,include the fund's lump sum value in the resources determination for the month following that in which the individual receives the denial notice.

D. Development and Documentation

1. Evidence

If an individual has a retirement fund,determine and document whether he/she is eligible for periodic payments per SI 00510.001 ff. If not, determine and document whether he/she can make a lump-sum withdrawal.

2. Determination

If the individual can withdraw any of the retirement fund, it is a resource in the amount that is currently available.

E. Related Policies

1. Filing For Other Benefits

If an individual is eligible for periodic retirement benefits, he/she must apply for those benefits to be eligible for SSI. If he/she has a choice between periodic benefits and a lump sum, he/she must choose the periodic benefits.

2. Nonliquid Resource

Absent evidence to the contrary, assume that resources in the form of retirement funds are nonliquid (SI 01110.300 B.).

3. Conditional Benefits

An individual with excess nonliquid resources, such as retirement funds, may qualify for conditional benefits while awaiting payment (SI 01150.200 ff.).

4. Deeming Exclusion

If an ineligible spouse, parent, or spouse of parent owns a retirement fund,we exclude it from the deeming process (SI 01330.120 and 01330.220). See SI 00830.500 regarding the treatment of interest income.

F. Example

1. Situation

Jeff Grant currently works 3 days a week for a company where he has been employed full-time for 20 years. Under his employer's pension plan, Mr. Grant has a $4,000 retirement fund. The CR confirms that Mr. Grant could withdraw the funds now, but there would be a penalty for early withdrawal and he would forfeit eligibility for an annuity when he stopped working.

2. Analysis

Since Mr. Grant can withdraw the retirement funds without terminating employment, they are a resource in the amount available after penalty deduction. This is true despite the fact Mr. Grant forfeits eligibility for periodic annuity payments in the future. Since SSI is a current needs program, all sources of available support (unless otherwise excluded) are considered in determining eligibility.

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SI 01120.210 - Retirement Funds - 12/04/2012
Batch run: 12/04/2012