Leaderboard

Based on your earlier post, the 62 retirement age only applied to post 2009 accruals. The benefits that were accrued prior to 2009 still have an age 55 retirement age attached to them. You cannot change the retirement age of an accrual since it is a right and feature of the benefit when earned. The benefit was payable at 55 when it was earned. You can't just change that to 62. That would be an impermissible reduction of value. Therefore, if someone with a pre 2009 accrual, works beyond age 55, you need to deal with the late retirement issues associated with those accruals. Accruals earned after 2009 are different because the retirement age is 62. Even though they are unreduced for early at 55, you don't have to adjust them between 55 and 62 because it is an early retirement subsidy and not the normal retirement benefit.

This is the only relevant item I could find in the Gray Book, and I have not checked to see if there is other (later) official guidance. Gray Book 2004-42 Treas. Reg. §1.401(a)(9)-2, A-2(a) provides that except in the case of a 5%-owner, the “required beginning date” is April 1 of the calendar year following the later of the calendar year in which the employee attains age 70-1/2 or the calendar year in which the employee retires from employment with the employer maintaining the plan. If December 31, 2003 is the employee’s last day at work, and the last day for which he is paid or entitled to payment of wages, is that the date of “retirement”. Or is January 1, 2004, the first day he is not employed, the retirement date? When is the employee’s required beginning date? RESPONSE “Retirement” is the last day worked, not the definition of retirement date in the plan. What date is an employee’s last day worked is a facts and circumstances determination. The facts and circumstances are based on the employer’s practice concerning the last day an individual is considered an employee. The above Response is a summary, prepared by representatives of the Program Committee, of the oral responses to the question posed to certain staff members of the Treasury and IRS, which represent only personal views of the individuals who provided them. Accordingly, the Response does not necessarily represent the positions of the Treasury or the IRS and cannot be relied upon by any taxpayer for any purpose. Copyright © 2004, Enrolled Actuaries Meeting All rights reserved by Enrolled Actuaries Meeting. Permission is granted to print or otherwise reproduce a limited number of copies of the material on the diskette for personal, internal, classroom, or other instructional use, on the condition that the foregoing copyright notice is used so as to give reasonable notice of the copyright of the Enrolled Actuaries Meeting. This consent for free limited copying without prior consent of the Enrolled Actuaries Meeting does not extend to making copies for general distribution, for advertising or promotional purposes, for inclusion in new collective works, or for sale or resale.

It would be my expectation that if there is a cut-off for 415 purposes during the plan year of termination, it would be the effective date of plan termination. I would not see either the filing date for the final 5500 or the date on which plan assets are distributed as relevant for that purpose.

I'm with Bird. For example, compare it to health coverage. If he was covered under the group medical plan for December, his COBRA notice would say that his last day of coverage is December 31, 2014, and that he is eligible for continuation coverage starting on January 1, 2015. He is not an employee in 2015. His last year of employment is 2014. His RBD is 4/1/15. Administration Simplification Rule #8: The employment status change office is closed on the last day of the month.

That is really odd. I think it is valid because it is not based on service for the Employer. But how do you find out who is a college student? How could you possibly enforce it? That would be my concern. What if they drop out and forget to tell you? What if they were not in college before, but subsequently enroll, and forget to tell you (or intentionally withhold the information?). The plan should not include criteria that is not based on information it can verify. That is just plain silly.

QDROphile has captured my thoughts very eloquently. I like his emphasis: if the plan did nothing wrong, then the plan should stay out of it. Of course, it's reasonable for the plan to review that question of "wrong", but that is an internal review, not involving the P or the AP.