New Tax Break for Retired Public Safety Officers (Law Dogs)-

[BlackHawkPaul]

Upcoming Premium Conversion on Health Insurance
Date:Monday, November 06, 2006 7:03:49 PM
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Change in Pension Act § 845

[On August 17, 2006, President Bush signed the Pension Protection Act of 2006]
Amends IRC §§ 402, 403 and 457 to allow “eligible retired public safety officers” to elect to exclude from gross income certain distributions made from an “eligible retirement plan” to pay “qualified health insurance premiums.”  The exclusion is limited to the aggregate amount of actual annual premiums paid, up to $3,000.  To be eligible, the premiums must be paid directly by the retirement plan to the insurance provider.  Premiums paid directly to the retiree would not be eligible.



 Under this provision, an eligible retired public safety officer is “an individual who by reason of disability or attainment of normal retirement age” is separated from service with the employer who maintains the eligible retirement plan “from which the distributions are made.  “Public safety officer” is further defined as having the same meaning as defined under section 1204(9)(A) of the Omnibus Crime Control and Safe Streets Act of 1968 (codified in 42 USC § 3796b).



 Comment:  This definition of public safety officer includes a broad range of individuals serving federal, state, local and other public agencies as officially recognized law enforcement officers (e.g., police, corrections, probation, parole, and judicial officers), firefighters (e.g., paid and volunteer), rescue squad members, and ambulance crews, among others.  Note, however, that the exclusion is limited to individuals who separate from service due to “disability or attainment of normal retirement age.”  Therefore, individuals retiring before normal retirement age would not be eligible.


 

[fourfingersofdeath]

We got a pretty god tax break here as well, as of the end of the financial year, jun30 next year, no tax will be charged on superannutaion pensions or lump sum payouts at age 60 or later. I will have to pay tax (not much, because all of my contributions were made with after tax dollars (you only gotta pay it once), I will only have to pay tax of the profit the fund has made over the years. When I hit 60 in 16mths, the tax stops! Not a bad deal. Mick.