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Aged, Blind and Disabled Manual Policy Manual Number: 110.050 Section: Financial Eligibility Requirements Chapter: ABD Countable and Excluded Resources

September 1, 2026 Division of TennCare 45 Retirement accounts and pension funds are excluded:

• if termination of employment is necessary to access the funds; and

• excluded from deeming, if owned by an ineligible spouse or an ineligible parent (non-institutional categories).

Note: Retirement accounts and pension funds owned by a community spouse are considered in the resource assessment and in determining the institutionalized spouse’s eligibility for Institutional Medicaid.

When a retirement account or pension fund is an individual’s resource, distributions and systematic withdrawals are not income, but are resources that have changed from one form to another.

Types of Retirement Plans

Retirement plans may be established by an employer for the benefit of employees or set up through a financial institution for the benefit of an individual. Qualified plans are employer-sponsored plans that qualify for tax-favored treatment because they meet the requirements of the Internal Revenue Code. There are two basic types of qualified plans: defined benefit plans and defined contribution plans.

Defined Benefit Plans

Defined benefit plans promise a participant a specified monthly benefit at retirement, often based on salary, age and length of employment. A traditional pension is the most common type of defined benefit plan. Generally, pension funds cannot be accessed until a participant retires or attains the normal or early retirement age specified in the plan, at which time the participant has the option to receive the funds in either a single lump sum or in periodic payments. Even after an individual is eligible to receive funds in a lump sum, pension funds are not counted as resources if the individual is eligible for periodic payments that could begin immediately.