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My previous employer eliminated our original pension for anyone with less than 25 years seniority. They replaced it with a cash plan for a limited period of time. When I was laid off, I received this lump sum and rolled it over to an IRA. Now State of Illinois Unemployment is questioning my eligibility due to the fact that I "received a pension."
Since this lump sum was rolled over to an IRA, and I'm not receiving monthly payments, can this affect my UI benefits?
In WI, direct lump sum rollovers do not affect your benefits nor, for that matter, do monthly payments from a pension plan if they treated as rollovers into an IRA. However, IL may have different rules. Since you received the money and then rolled it over into an IRA, it might not comply with the rules. It is a murky area. I had to supply evidence that payments were, in fact, rolled over - faxed a copy of statement from IRA trustee showing this. Adjudicator responded favorably the same day. However, this money has never passed through my hands.
you just have to prove that you rolled it over. I took money out of my 401k without stopping by benefits because the money contributed was 100% contributed by me.
I think there was a thread about this a few months ago. IIRC true rollovers should be OK but there may be issues with actual withdrawals and possibly Roth conversions.
Logically speaking, it doesn't make much sense to me that you can collect UIC while on SS, but may not be able to if you withdraw your own retirement funds...
I think there was a thread about this a few months ago. IIRC true rollovers should be OK but there may be issues with actual withdrawals and possibly Roth conversions.
Logically speaking, it doesn't make much sense to me that you can collect UIC while on SS, but may not be able to if you withdraw your own retirement funds...
the reason is because some people have employer matched contributions. They don't consider that "your money" They will let you collect UI but only a certain % based on what your contributions really are. In NJ, if you contribute 100% , you can withdraw at no expense to your UI. At least that's how it works in NJ.
IRA accounts shouldnt matter, especially if you're not drawing any payments. UI benefits are about work, not your life savings.
I have a small IRA too that will help when Im over 59; but the State doesnt care.
The real issue on 401k withdrawals is the employer contribution. Apparently, in NJ they are willing to review and pro-rate employer/employee portion. In WI, they accept direct lump sum rollovers into an IRA. I have written asking about withdrawals from a self-funded IRA. Canned response back - any withdrawal of retirement monies must be reported.
I have not made any withdrawals from any IRAs or 401k for that reason. All payments will cease until they do their review. Last time that happened when I reported a pension payment and got an immediate ruling from adjudicator, payments did not resume until 6 weeks later AFTER I wrote the Governor complaining about the delay. Just processing the paperwork is a problem, apparently. I called the adjudicator and she said they were 8 weeks behind in updating the computers even when a decision had been rendered.
Don't need that aggravation - so staying clear of that. My benefits end in August, anyway.
I had planned to make a withdrawal in 2010 but decided not to risk the complication. It's an unfortunate situation because for those over 59.5, being unemployed can be a good opportunity to withdraw or do a partial Roth conversion at lower tax rates...
I had planned to make a withdrawal in 2010 but decided not to risk the complication. It's an unfortunate situation because for those over 59.5, being unemployed can be a good opportunity to withdraw or do a partial Roth conversion at lower tax rates...
I expected the Gov to add a tax cut for the long term unemployed withdrawing from their 401K. Obviously, they couldn't care less about us.
I expected the Gov to add a tax cut for the long term unemployed withdrawing from their 401K. Obviously, they couldn't care less about us.
I agree - seems like a limited withdrawal allowance would be a pretty inexpensive way to offer some relief. But in addition to tax relief they would have to clarify that withdrawals would not affect UC. That might conflict with some state policy, but for people getting federally-funded UC that doesn't seem unreasonable.
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