Benefit Offset

AAA

DEFINITION of 'Benefit Offset'

A reduction in the amount of benefit payments received by a member of a retirement plan which may result when the member owes money to the plan.



INVESTOPEDIA EXPLAINS 'Benefit Offset'

A benefit offset is intended to adjust the retirement benefits the plan member receives, given the overdue contributions the member should have paid in the past. Essentially, the overdue contributions owed by the member are deducted from his or her retirement payments to ensure they are paid to the plan. This type of offset can also occur if the member is receiving retirement benefits from sources other than the plan. The U.S. Social Security Act provides for the withholding of up to 10% of a plan member's benefits to compensate for funds owed to the plan.

RELATED TERMS
  1. Benefit Allowance

    Money that a company or government agency provides to an employee ...
  2. Social Security

    A United States federal program of social insurance and benefits ...
  3. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  4. Employee Contribution Plan

    A company-sponsored retirement plan where employees may elect ...
  5. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  6. Defined-Benefit Plan

    An employer-sponsored retirement plan where employee benefits ...
Related Articles
  1. Retirement

    Are the distribution rules for 401(k) and 403(b) plans the same as those for IRA plans?

    The distributions are different for IRAs, qualified plans and 403(b) plans.For IRAs, qualified plans (such as 401(k), money purchase and profit sharing plan), and 403(b) plans, distributions ...
  2. Taxes

    Can You Deduct Your IRA Contributions?

    We help you answer this important question, which is determined by whether you are considered an "active participant".
  3. Taxes

    The 401(k) and Qualified Plans Tutorial

    Learn about eligibility requirements, contribution to and distribution rules for these retirement plans.
  4. Professionals

    Retirement Bliss? Not So fast: When Savings Lag

    Most people aren't saving enough for retirement. Here are some tips savers and financial advisors can use to change that.
  5. Professionals

    Financial Planning Tips And Resources For Veterans

    Veterans or all kinds have special needs when it comes to financial planning. Here are some tips as well as a comprehensive list of online resources.
  6. Professionals

    Where You Clients Should Retire (For Tax Reasons)

    Are your clients asking where they should retire? That's a tough call, but here we cover the tax angle.
  7. Professionals

    Should Your Retiring Clients Pay Off A Mortgage?

    Should your retiring clients pay off their mortgages? It's more complicated than 'yes' or 'no,' so here's a quick guide.
  8. Professionals

    Why Retirement Advice Is Better But Still Lacking

    With a multitude of resources available to savers and their advisers, you'd think that retirement planning would be a breeze. Here's why you'd be wrong.
  9. Professionals

    Retirement: How Much Should Clients Be Saving?

    5%? 10%? 15%? Which retirement savings rate is the right one? More is better, but too much isn't ideal. Here's a quick guide for you and your clients.
  10. Retirement

    Is it a good idea to add a reverse mortgage to your retirement strategy?

    A reverse mortgage can be a great way to increase retirement income. Does it work for everyone? What happens after a homeowner reverse mortgages a home?

You May Also Like

Hot Definitions
  1. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  2. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  3. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  4. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  5. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
  6. Bank Guarantee

    A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor ...
Trading Center