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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 116716
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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I have recently stopped working because of my health. I would

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I have recently stopped working because of my health. I would like to close one of my four tax shelter annuities. I have not contributed to this particular one since 1986. However, the company wants a LOT of personal information first. I cannot find where the government wants to know my physician's name, the signature of the previous employer, nor specifically what I plan to do with the money. Who is "requiring" this information?
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

The PLAN is requiring the information. If these are plans under the various tax exempt codes, the plan must document that you are taking money out for a specifically approved reason for you to avoid the tax penalties for early withdrawal. Each plan, because they are a matter of contract according to ERISA, governs how the plan will operate and whether or not emergency withdrawals provided for under the IRS Code will be permitted by the plan. Each plan does not have to permit the acceptable emergency withdrawal, that is a matter of contract in your plan description.

When a plan description does allow for the emergency withdrawal as allowed under the IRS Code, the plan administrator has to satisfy themselves that the reason for withdrawal fits under the code exemptions and they have to maintain that proof so that you are not charged a penalty for withdrawal. What proof they require to satisfy themselves that you meet the requirements is left to the discretion of each plan.

However, because these plans are a matter of contract and they do not have to release funds on emergency basis except in accordance with the plan description, you have to comply with the plan's requirements in order for them to release the funds to you and the information they are seeking is not in the IRS Code or even the CFR, it is the plan's right to verify the reason for the withdrawal fits under the Plan Description (contract) of the plan.

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Customer: replied 4 years ago.

What if I don't mind paying the penalty? When I joined the plan, the requirement for personal information was not explained. When I questioned the company, they connected me with the "research department". I have had a medical condition for 50 years.

Again, these plans are governed by the terms of the plan description, so you have to read the plan description on each plan separately to determine what the contractual requirements are for them to release the money early. Some plans will release only for emergency exemptions provided for under the IRC and others will not release money early for any reason and some will release money without reason if the employee pays the penalty. Each and every plan description is different and you are bound by that plan description.
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