<p>Let’s say you are required to contribute to your pension plan by your employer. CSS wants to know how much you contributed last year. Just curious, how will the pension and your contribution be viewed? Will the total in you pension plan be counted as an asset or do they take into consideration the amount that you must contribute so it counts towards your liabilities?</p>
<p>And these pension plans (not 401K) that employers have, that we have all seen just vanish into thin air…i.e. ENRON…do they hurt you when you’re trying to get the lowest EFC possible???</p>
<p>bump…</p>
<p>anybody know … please?</p>
<p>retirement accounts do not generally count same as savings for EFC
However- if you are using 2006 income to do the FAFSA or PROFILE for 2007-2008 school year
the money that you put * into* your retirement account in 2006-
WILL count as available income for that year.</p>
<p>Emerald is right. Even if you are required to contribute to a plan, those contributions which you may deduct for tax purposes are added back to your income for financial aid purposes. Most schools will not assess your qualified retirement accounts as assets, but schools that use PROFILE and their own apps, have a lot of leeway, and can, at their discretion take pension money into account, and some colleges are beginning to do this if the amounts are above certain threshholds that the school sets. However, I have never seen a school interested in any losses incurred by pensions. By not using assets in a pension plan as part of financial aid formulas, those who have such assets are advantaged over those who do not. If your are self funding your insurance and have no qualifed plan holding your money, those assets are tapped at about 6%.</p>
<p>Let me start by saying that I don’t have such a pension, but IIRC certain state and federal pensions (thrift savings plan IIRC) are now participant funded, but do NOT end up being reported in the same box on your W2 as a 401k or 403b which are above and beyond the required contribution.</p>
<p>The answer to the question is that if a “mandatory” pension contribution is reported on a W2 in (I’ cant remember the box number - some accountant help me here) it WILL hurt you as far as FA as you have to add it back into the FAFSA and Profile forms. If it does not get reported in that box on the W2, you are not required to add it back into the FAFSA or Profile where you list 401k, 403b, and tax-deducted IRA contributions.</p>
<p>As with all financial information posted on this site, check this with your tax preparer or accountant (and all the other usual disclaimers).</p>