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  1. #1
    Join Date
    Mar 2010
    Location
    Pennsylvania
    Posts
    1

    Default Does 401k Distribution Impact Comp Benefits

    My dad is 69 years old. 3 years ago, he was permanently disabled and blinded in an accident at work and is receiving workers comp payments in PA.

    At age 70, he must start taking distributions from his 401k retirement account. He was 100% vested at the time of the accident, old enough to draw on it without penalty, and hasn't contributed to it since the accident.

    In my opinion, his 401k account was "his money" prior to the accident and he should be able to take distributions, and pay taxes on them, without affecting his compensation. However, he wants to make sure that's the case before he draws on it a year from now.

    Is his 401k distribution going to affect his compensation payments?

  2. #2
    Join Date
    Dec 2007
    Location
    Tunkhannock, PA
    Posts
    1,111

    Default Re: Does 401k Distribution Impact Comp Benefits

    Maybe. Was the injury after 1996? If so, did the time of injury employer contribute to the 401K?
    Timothy D. Belt, Esquire
    Helping injured workers in Northeast Pennsylvania.
    belt-law@belt-law.com
    www.belt-law.com

    DISCLAIMER: This post is intended as general information applicable only to the state of Pennsylvania. The information given is based strictly upon the facts provided. This post is not intended to create an attorney client relationship, or to provide any specific guarantee of confidentiality.

  3. #3
    Join Date
    Mar 2010
    Posts
    1

    Default Re: Does 401k Distribution Impact Comp Benefits

    It's me, coalcracker, for some reason even if I reset my password, the forum says the new password is wrong. I cannot log in here as that user anymore. I'm not new to forums like this but for some reason, my other account is hosed.

    Thanks for the reply. My father was disabled 3 years ago, which would have been 2007. My father was receiving employer matching on his 401k (50 cents for every dollar the employee contributed) up until the time of the injury, but no one contributed anything to the 401k after the injury. He has not taken any distributions yet. Thanks!

  4. #4
    Join Date
    Dec 2007
    Location
    Tunkhannock, PA
    Posts
    1,111

    Default Re: Does 401k Distribution Impact Comp Benefits

    Section 204(a) of the Pa WC Act, provides for a credit for pension benefits received by the employee to the extent that the pension plan was funded by the employer, whether insured or self-insured, directly liable for the payment of compensation benefits.

    You should also be aware that there is a rather unfortunate line of cases in which accepting retirement benefits has been construed as voluntary removal from the work force. The argument being used by the IC is that once the individual voluntarily removes themselves from the work force, the loss of earnings is as a result of the removal and not the work injury, so they are no longer responsible for wage loss benefits.
    Timothy D. Belt, Esquire
    Helping injured workers in Northeast Pennsylvania.
    belt-law@belt-law.com
    www.belt-law.com

    DISCLAIMER: This post is intended as general information applicable only to the state of Pennsylvania. The information given is based strictly upon the facts provided. This post is not intended to create an attorney client relationship, or to provide any specific guarantee of confidentiality.

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