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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 46 Some defined benefit plans may allow a participant to choose more than one form of benefit. For example, an individual may receive a portion of the accrued benefit in periodic payments, but may also have the option of withdrawing a portion in a lump sum. If a defined benefit plan provides this option, each portion of the accrued benefit is treated separately. Any amount that can be withdrawn in a lump sum is counted as a resource. If periodic payments are received, the payments also count as unearned income in the month received.

Individuals eligible for periodic benefits must take all necessary steps to obtain any benefits to which they are entitled, unless they can show good cause for not doing so.

Defined Contribution Plans

Defined contribution plans do not promise a specific amount of benefits at retirement. An employee and an employer make contributions to the employee’s individual account under the plan. Typically, funds within a defined contribution plan can be accessed at age 59 ½ without a tax penalty, or before age 59 ½, with a tax penalty. Other withdrawal restrictions may apply depending on the plan. Examples of defined contribution plans include 401(k) plans, 403(b) plans, and Keogh plans.

401(k) and 403(b) Plans

Funds held in a 401(k) or 403(b) retirement account are countable when an individual is no longer job-attached or, if part of a profit- sharing plan or stock bonus plan, when an individual has attained age 59 ½. Funds for a Savings Incentive Match Plan for Employees (SIMPLE) account may be held in a 401(k). Funds in a SIMPLE plan set up as a 401(k) should be treated as a 401(k).

Keogh Plan

A Keogh plan established for a self-employed individual is considered accessible and is counted as a resource to the individual even if the household is not actually accessing the funds.