DEFINITION of 'Unemployment Compensation Amendment Of 1992'
A law in the United States that allows a terminated employee to take employer-sponsored retirement savings and place them into a retirement plan of their choice. The Unemployment Compensation Amendment of 1992 gives the option upon termination of directly transferring the funds into an individual retirement account (IRA) or qualified pension plan of the individual's choice. If the individual would like to receive the distribution directly, there will be a 20% withholding penalty paid to the Internal Revenue Service (IRS).
BREAKING DOWN 'Unemployment Compensation Amendment Of 1992'
The amendment in 1992 to the Unemployment Compensation Act allows the ex-employee to keep the money he or she has saved and invested while at the company. This applies to either defined contribution pension plans or defined benefit pension plans. Because of this, employees do not have to worry about losing money being matched by their employer towards their investment plan upon being terminated.