Military Survivors Benefit Program (SBP) is a Non-qualified plan.
Qualified plans include:
Non-qualified plans include:
But can non-qualified plans have pre-tax contributions? I thought one of the definitions of a qualified plan was to have pre-tax contributions. (And remember, the SBP is NOT Military Retirement but rather an annuity that some members elect to do via payroll deductions.)
Sorry forgot to add this link:
<a rel="nofollow" target="_blank" href="https://www.dfas.mil/retiredmilitary/provide/sbp/advantages.html">https://www.dfas.mil/retiredmilitary/provide/sbp/advantages.html</a>
I didn't see a response another person's response that military survivor benefits are taken out pre-tax. Why isn't that qualified? Can you explain the difference please?
The Qualified retirement plans meet the guidelines set by the ERISA where as non qualified retirement plans do not.
Per the ERISA website, "ERISA requires plans to provide participants with plan information including important information about plan features and funding; sets minimum standards for participation, vesting, benefit accrual and funding; provides fiduciary responsibilities for those who manage and control plan assets; requires plans to establish a grievance and appeals process for participants to get benefits from their plans; gives participants the right to sue for benefits and breaches of fiduciary duty; and, if a defined benefit plan is terminated, guarantees payment of certain benefits through a federally chartered corporation, known as the Pension Benefit Guaranty Corporation (PBGC)."
For more information, see the link below:
Employee Retirement Income Security Act