Unemployment Compensation Amendment Of 1992

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.

RELATED TERMS
  1. Qualified Retirement Plan

    A plan that meets requirements of the Internal Revenue Code and ...
  2. Pension Fund

    A fund established by an employer to facilitate and organize ...
  3. Past Service

    Service to an employer that is recognized for the defined benefit ...
  4. Distress Termination

    A thinning of an employee base that takes place when a company's ...
  5. Voluntary Plan Termination

    The discontinuance of a defined benefit plan by an employer. ...
  6. Highly Compensated Employee

    For employer-sponsored, tax-advantaged retirement plan purposes, ...
Related Articles
  1. Retirement

    How Does a Pension Plan Work?

    A pension plan is a savings plan maintained by an employer on behalf of its employees for their retirement.
  2. Retirement

    Florida's Surprisingly Flexible State Retirement System

    Retired Florida employees can choose a 401(k)-style investment plan or a traditional pension.
  3. Retirement

    Chipping Away At The Pension Freeze Trend

    Learn five steps that'll put your retirement back into your own hands.
  4. Retirement

    What's a Qualified Retirement Plan?

    Employers establish qualified retirement plans to help their employees save money.
  5. Retirement

    Understanding Defined Benefit Pension Plans

    An employer-sponsored retirement plan where employee benefits are based on a formula using factors such as salary history and duration of employment.
  6. Financial Advisor

    How to Advise Clients with Frozen Pensions

    Financial advisors are on the front line in advising clients impacted by a frozen pension. Here's what they need to consider.
  7. Retirement

    7 Signs Your Pension Fund Is In Trouble

    Even if you're lucky enough to have a pension plan, you can't assume it'll pay out.
  8. Retirement

    Pension Plans: Pain Or Pleasure?

    Employees have a love/hate relationship with this retirement option.
  9. Retirement

    America's Frozen Pension Dilemma

    Unfortunately, there are several factors that have eroded the presence of pension plans in America, and workers need to be prepared to replace that expected income for their retirement years. ...
  10. Retirement

    The 401(k) and Qualified Plans Tutorial

    Learn about eligibility requirements, contributions and distribution rules for these retirement plans.
RELATED FAQS
  1. How does a defined benefit pension plan differ from a defined contribution plan?

    Learn the differences between defined benefit plans and defined contribution plans when reviewing employer-sponsored qualified ... Read Answer >>
  2. Is an IRA a qualified plan?

    Learn about the definition of a qualified retirement plan and some of the features and benefits of individual retirement ... 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. How can an entrepreneur save for retirement?

    Learn about the retirement savings plan options for entrepreneurs and small business owners, including administration and ... Read Answer >>
  5. Is a Simplified Employee Pension (SEP) part of the Employee Retirement Income Security ...

    Understand when a SEP plan falls under ERISA, how this act protects individual retirement savings and why the SEP is a popular ... Read Answer >>
  6. Who bears the investment risk in 401(k) plans?

    Who actually bears the investment risk in a pension plan depends on the type of pension plan that is employed. In a broad ... Read Answer >>
Hot Definitions
  1. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  2. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  3. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  4. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  5. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
  6. Weighted Average Life - WAL

    The average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding. Once calculated, ...
Trading Center