Retirement (Pension) Plans
The following summary of policy on retirement plans is distilled
from Food Stamp Program rules, and interpretations sent to FNS regional
offices over time. There is a $2000 limit on the resources that
a household may have and still receive food stamps. The limit is
$3000 for a household with an elderly (age 60 or older) or a disabled
member. We count cash and savings as resources, but generally exclude
retirement plans from resources.
Recently we have received a number of questions about the excludability
of various retirement (pension) plans. We believe that such questions
stem from the fact that many formerly employed individuals are applying
for food stamp assistance because of the economic downturn. The
following are general guidelines used in determining the exclusion or
inclusion of pension plans as a resource.
In general, Food Stamp regulations provide that the following types of
retirement savings and pension plans are excluded from consideration
as a resource:
-
457 plans (plans for State and local governments and other tax-exempt
organizations);
-
401(k) plans (generally a cash-or-deferred arrangement and generally
limited to profit-making firms);
-
Federal Employee Thrift Savings plan;
-
Section 403(b) plans (tax-sheltered annuities provided for employees
of tax-exempt organizations and State and local educational organizations);
and
-
Section 501(c)(18) plans (retirement plans for union members consisting
of employee contributions to certain trusts that must have been established
before June 1959); and
-
Keogh plans that involve a contractual obligation with someone who
is not a household member
The Food Stamp regulations provide that the following types of retirement
savings are included as a resource, regardless of whether there
is a penalty for early withdraw:
-
Keogh plans that involve no contractual obligation with anyone who
is not a household member;
-
Individual Retirement Accounts (IRAs); and
-
Simplified Employer Pension Plans (SEPs) (which are considered to
be IRAs).
If the cash value of an excluded type of plan is rolled over into
an IRA, the cash value loses its exclusion and becomes an included resource
following the roll-over.
Last
modified:
11/21/2008
|