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Retiree Medical Subsidy


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Guest MikeAIGFA
Posted

Hello - I was hoping someone could provide some insight on the following:

How are employers (or aren't they) offering medical subsidies for their retirees? Currently one of our clients has a medical subsidy for those employees retired with their DB plan; however, no medical subsidy is provided to the DC (401a) participants and they (client) would like to provide a benefit to those DC employees.

If anyone can provide any insight on this subject, I would greatly appreciate it.

Thank you in advance.

Mike O'Sullivan

Posted

The DB plans may be providing benefits under section 401(h) of the tax code. A 401(k) plan cannot provide benefits under 401(h), but a money purchase pension plan could.

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