[ESD Only cares about retirement withdrawals from an employer from whom you worked for recently, and only if the employer contributed a portion to that fund and if so, the percent or amount that they contributed to that fund which was withdrawn]
Is the retirement or 401k from an employer listed in your base year? This is the employer's listed in the chart on page 2 of your monetary determination; effectively the employers for whom you last worked in the last 18 months If no, then this is not reportable and does not affect benefits. If YES continue
Did the employer contribute any amount or percent to the retirement or 401k fund that you are withdrawing? If they did not contribute at all then this is effectively just a savings account where you saved your own money and none of this is an employer payment. This is effectively like transferring money from your savings account to your checkings account. If no, then this is not reportable and does not affect benefits. If YES continue
If the above two answers are yes, then ESD needs to know what portion of the withdrawal was the employer contributed portion. For example let's say you withdrew $2,000 and the employer had been matching 2%, This means that of the $2,000 the employer contributed $40. $40 will be deductible from benefits as per the earnings deductions chart. This means that you need to supply a statement from the entity that manages the fund to demonstrate the portion of the withdrawal that was employer contributed as that is deductible from benefits.
(1) The share contributed by the employer to the pension is deductible from benefits. The amount of the deduction equals the percentage of the contribution(s) made by the base year employer as of the last pay period in the base year in which the contribution(s) was made. The department will prorate the employer's share to a weekly amount.
(a) The department will presume the services you provided to the employer in the base year affected eligibility for or increased the pension amount unless you provide verification from the employer or the pension fund administrator showing otherwise.
(b) The department will presume you made no contribution to the pension unless you provide evidence satisfactory to the department that such a contribution was made.
(2) A disability pension based entirely on the percentage of disability is not deductible. For example, disability payments paid by the Veterans Administration (VA) based on extent of injury are not deductible.
(3) Retirement benefits paid by the Social Security Administration are not deductible from benefits.
(4) For purposes of this section, "pension" includes retirement benefits or retired pay, annuity, or other similar periodic payment.
So, to answer your question:
If I take out $42k from my 401k will this eliminate my benefits?
We would need to know, from the law, "What share of $42,000 was contributed by the employer, as that is listed as deductible from benefits."
Which says that A law was removed which previously described earnings deductions for lump sum retirement pay:
and removed the deduction of lump sum pension or retirement benefit payments from an individual’s weekly unemployment insurance benefit payment.
Therefore documentation showing the amount the employer contributed to the retirement payment(s) should be provided to ESD as an attachment to a message in eServices
Earnings deductions are administrated within the department for customer service, so clarifications should be directed to calling customer service.
One extra point, if the retirement benefits were earned at an earlier job than the ones that are part of your benefit year, there will be no deduction. This is one of the questions that is asked when you report a disbursement from a retirement account. This was my situation, where my last few jobs didn't contribute to my retirement, the IRA was from much earlier jobs and was not counted against my benefit.
Thanks for this clarification. I was planning to withdraw from a 401k set up by a previous employer (for whom I stopped working long before my benefit year), and that account was also solely my contribution with no employer match, so it sounds like this is not deducted from my UI benefits. Very good to know!
So they matched my amount I put in yearly, I put in for 15 years into it. It was also effected by stocks that I had with it as to it going up or down through the years. Does it go by this last year that was contributed?
Does it go by this last year that was contributed?
Based on the law above...
"The amount of the deduction equals the percentage of the contribution(s) made by the base year employer as of the last pay period in the base year in which the contribution(s) was made"
A base year is the last 18 months of wage and hour data, so
IF The employer from whom You are receiving the retirement payments was the one from whom you are separating and whom you work for for the last 15 years all the way up including the last 18 months, then deductions will occur as per the above sentence from the law in the previous reply.
IF The employer from whom you are receiving retirement payments was not an employer in the last 18 months, from whom you separated from before your base year, then those payments would not cause earnings deductions.
1
u/SoThenIThought_ Admin for WEBA.Law, WA Unemployment Benefits Feb 12 '23 edited Apr 16 '24
[ESD Only cares about retirement withdrawals from an employer from whom you worked for recently, and only if the employer contributed a portion to that fund and if so, the percent or amount that they contributed to that fund which was withdrawn]
Is the retirement or 401k from an employer listed in your base year?This is the employer's listed in the chart on page 2 of your monetary determination; effectively the employers for whom you last worked in the last 18 months If no, then this is not reportable and does not affect benefits. If YES continueDid the employer contribute any amount or percent to the retirement or 401k fund that you are withdrawing?If they did not contribute at all then this is effectively just a savings account where you saved your own money and none of this is an employer payment. This is effectively like transferring money from your savings account to your checkings account. If no, then this is not reportable and does not affect benefits. If YES continueIf the above two answers are yes, then ESD needs to know what portion of the withdrawal was the employer contributed portion. For example let's say you withdrew $2,000 and the employer had been matching 2%, This means that of the $2,000 the employer contributed $40. $40 will be deductible from benefits as per the earnings deductions chart. This means that you need to supply a statement from the entity that manages the fund to demonstrate the portion of the withdrawal that was employer contributed as that is deductible from benefits.--------- Sources --------
Has this law...
WAC 192-190-025: How is the pension deduction calculated?
(4) For purposes of this section, "pension" includes retirement benefits or retired pay, annuity, or other similar periodic payment.
So, to answer your question:
We would need to know, from the law, "What share of $42,000 was contributed by the employer, as that is listed as deductible from benefits."
Also from a brief Google search with the following keywords, esd wa retirement pay
I found this website
https://esd.wa.gov/newsroom/rulemaking/lump-sum-retirement-deductions
Which says that A law was removed which previously described earnings deductions for lump sum retirement pay:
Therefore documentation showing the amount the employer contributed to the retirement payment(s) should be provided to ESD as an attachment to a message in eServices
Earnings deductions are administrated within the department for customer service, so clarifications should be directed to calling customer service.