In the case of
tax-qualified retirement plans, these penalties are imposed on the entity manager, not the plan.
To that end, the anti-alienation provisions of the Employee Retirement Income Security Act (ERISA) section 206(d) and IRC section 401 (a)(13) have protected
tax-qualified retirement plans from the claims of creditors of plan participants and their beneficiaries, with three major exceptions.
1994), which holds that the bankruptcy court is bound by an IRS determination that a qualified plan should not lose its
tax-qualified status despite various improprieties in the administration of the plan.
Dallas Wood, a self-employed real estate broker, established a
tax-qualified defined benefit plan effective as of January 1, 1984.
"There are millions of seniors who purchased
tax-qualified long-term care insurance policies who would lose the option to deduct premiums at a point when living off limited retirement income and Social Security."
The report shows that 45.2 percent of workers who received a lump sum distribution after a change in jobs reinvested the money into another
tax-qualified financial savings account.
The House pension bill not only clarifies that the LTC portion of a contract may be
tax-qualified, but it goes further in that it generally treats the entirety of LTC insurance benefits, including amounts coming from annuity cash value, as a tax-free A&H insurance benefit.
Such funds allow a bank or thrift to manage the assets of
tax-qualified pension and profit-sharing plans on a pooled basis without creating an investment company, which would be subject to additional regulation as a mutual fund.
In turn, there will be more demand for changes in the tax regulations to allow insurers to mix
tax-qualified long-term-care plans with other insurance products.
Honorable mention in the field of taxation was awarded to "Creditor's Rights:
Tax-Qualified Plans and IRAs," by Mark P.
For employers to reap the benefits of the tax advantages noted above, the long-term care insurance offered to employees must be
tax-qualified. Non-tax-qualified LTC insurance may be perceived as having more liberal benefit triggers, making it easier for the client to qualify for benefits.
The amount of a participant's compensation that can be taken into account under a
tax-qualified pension plan is limited.
