Benefit Offset

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.



BREAKING DOWN '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. Target-Benefit Plan

    A benefit plan that is similar to a defined benefit plan since ...
  2. Plan Participant

    A plan participant either contributes into a pension plan or ...
  3. Member Month

    The number of individuals participating in an insurance plan ...
  4. Money-Purchase Pension Plan

    A pension plan to which employers and employees make contributions ...
  5. Qualified Retirement Plan

    A plan that meets requirements of the Internal Revenue Code and ...
  6. Other Post-Retirement Benefits

    Benefits, other than pension distributions, paid to employees ...
Related Articles
  1. Professionals

    Retirement Planning for the Self-Employed

    How to select a qualified retirement plan if you are self-employed and have no employees.
  2. Taxes

    The 401(k) and Qualified Plans Tutorial

    Learn about eligibility requirements, contributions and distribution rules for these retirement plans.
  3. Retirement

    The New Retirement Age

    Why are more and more people planning on working later into their golden years?
  4. Personal Finance

    Preparing Finances For Deployment: A Guide For Service Members

    Those who follow the instruction in this article can look forward to a homecoming of financial prosperity.
  5. Retirement

    What's a Defined Contribution Plan?

    A defined contribution plan is a company retirement plan that specifies the amount of money contributed to it.
  6. Taxes

    401(k) And Qualified Plans: Types Of Plans

    By Denise ApplebyDefined-Benefit PlansUnder a defined-benefit plan, employees' retirement benefits are predetermined by their compensation, years of service and age. For example, the plan ...
  7. Your Clients

    How to Cope With the New Social Security Rules

    Here's what clients and advisors need to know about the important and recent changes made to Social Security claiming options.
  8. Investing News

    SEP vs. Keogh Plans: Which is Right for You?

    SEP and Keogh plans each have their pros and cons. Here's how to choose which one is right for you.
  9. Budgeting

    The Complete Guide To Retirement Planning For 40-Somethings: Checking Your Status

    In some cases, individuals add as much as they can to their retirement nest egg and hope that it will be sufficient to meet their retirement needs. However, while such a strategy may work for ...
  10. Retirement

    6 Benefits Of Retiring Later

    Early retirement is a pipe dream for most Americans. But the reality is, there are some perks to stretching out the lifespan of your career.
RELATED FAQS
  1. What are qualified retirement plan types?

    Understand the different types of qualified retirement plans and what they mean in terms of employee and employer contribution ... Read Answer >>
  2. How do you plan for retirement if you have multiple employers? Can you combine retirement ...

    Retirement planning for those who work for more than one employer is essentially the same as for those who work for only ... Read Answer >>
  3. Is a 401(k) a qualified retirement plan?

    Examine the different types of qualified retirement plans, and discover if a 401(k) meets the definition of a qualified retirement ... Read Answer >>
  4. What are the benefits and advantages of the Teacher Retirement System?

    Learn about some of the primary benefits of a teacher retirement system and what similarities it has with other types of ... Read Answer >>
  5. At what age will I be eligible for the maximum Social Security payout?

    The year you choose for collecting your social security will play a large part in determining how much money you'll receive ... Read Answer >>
  6. Is a Thrift Savings Plan (TSP) a qualified retirement plan?

    Take advantage of the government's retirement plan for employees with the Thrift Savings Plan. As with a 401(k), contributions ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center