KayC

Thanks for the replies! Yes, we are considering other factors in the early retirement program (Bonus plan, FSA, vacation, etc). I appreciate the search term tip, David! And I answered too casually about penalty-free distributions - I was thinking about the IRS rule of 55, which I think is in the tax code you mentioned, C.B. I thought we did have to have the provision for that in the plan, but sounds like I might be mistaken.

Thank you for the responses! While you can't collect social security until age 62, 401k plans can have provisions that allow you to begin taking distributions at age 55 without penalty (but with tax). And, most of the early retirement takers will probably be high earners who have a bunch of money socked away...

We're planning an early retirement program, and want to make sure our 401k plan synergizes with the new program. We do currently have an early retirement provision in the plan document: "Early Retirement Age" means the later of: (i) attainment of age 55, and (ii) the 5 anniversary of Plan participation. If a Participant terminates from service before attaining age 55, but after the 5 anniversary of Plan participation, the Participant will be entitled to elect an early retirement benefit upon attaining 55. Our current match vesting schedule is 3 years (profit sharing is 6, but we don't do that) - I'm wondering if the vesting provision in the above is providing any additional benefit - doesn't seem like it. Is it standard to have that provision match regular vesting, or offer an accelerated vesting? If our goal is to have an attractive early retirement package, woul dit make more sense to not have a plan participation requirement? I'd love to hear anyone's thoughts who has an ERISA early retirement program!