Unemployment Compensation Amendment Of 1992

AAA

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).

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
  2. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  3. Pension Shortfall

    A situation in which a company offering employees a defined benefit ...
  4. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  5. Defined-Benefit Plan

    An employer-sponsored retirement plan where employee benefits ...
  6. Defined-Contribution Plan

    A retirement plan in which a certain amount or percentage of ...
Related Articles
  1. Taxes

    Changes In Tax Legislation And Regulation

    Keeping on top of these amendments can help you avoid penalties and take advantage of benefits.
  2. Retirement

    3 Reasons To Use An Employer-Sponsored Retirement Plan

    If you aren't participating in your employer-sponsored retirement plan, you're missing out! Learn the benefits.
  3. Retirement

    How IRA Contributions Affect Your Taxes

    Learn how to work with the tax man to avoid getting gouged when you convert your plans.
  4. Retirement

    Is Your Defined-Benefit Pension Plan Safe?

    Your plan may not last in a rocky market. Find out whether your savings will be affected.
  5. Retirement

    The Investing Risk Of Underfunded Pension Plans

    Determine the risk to a company's EPS and financial condition resulting from an underfunded pension plan.
  6. Retirement

    A Primer On Defined-Benefit Pension Plans

    Most of us will rely on a pension plan in the future, so it's best to know the details of the various plans before signing up.
  7. Taxes

    Tips For Moving Retirement Plan Assets

    Moving assets is common when changing jobs or retiring, but you have to do this carefully to avoid penalties.
  8. Retirement

    The Defined-Benefit Plan's Many Problems

    The shift in retirement plan schemes - from defined benefit plans to defined contribution plans - raises some important issues.
  9. Taxes

    Common Questions About Retirement Plans

    We offer some solutions for the individual taxpayer as well as the small business owner.
  10. Brokers

    Is there a downside to having a high liquidity ratio?

    Find out why it might be disadvantageous for a company to have liquidity ratios that are too high, and learn how to find a healthy liquidity range for a firm.

You May Also Like

Hot Definitions
  1. Trust Fund

    A trust fund is a fund comprised of a variety of assets intended to provide benefits to an individual or organization. The ...
  2. Christmas Tree

    An options trading strategy that is generally achieved by purchasing one call option and selling two other call options at ...
  3. Christmas Club

    A short-term savings account that usually pays out the full account balance to its account holders once each year, right ...
  4. Boston Snow Indicator

    A market theory that states that a white Christmas in Boston will result in rising stock prices for the following year. For ...
  5. Christmas Island Dollar

    The former currency of Christmas Island, an Australian island in the Indian Ocean that was discovered on December 25, 1643. ...
  6. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
Trading Center