toohot4tv

I'm thinking NRD is just a plan concept, not a statutory concept. All this is speculation based on the fact that me and Effen can't really find any regulations that go into the limitations of NRD. What I mean by this is that periodic payments are supposed to be made to each participant commencing on their NRA (not NRD). "Periodic" typically means monthly payments, but some plans make do make quarterly payments. Instead of cutting checks every single day due to each person being born on a different day of the month, the NRD concept of the first of the month makes things administratively simpler by just having checks processed once a month. Also, as stated above, typically plans have a "stability period" (I'm stealing this term) of one month for the NRD (first of the MONTH). Would a stability period of one year fly? I'm not sure. But perhaps if the stability period is one year, the participant should get back payments or an actuarial increase from the NRA to the NRD (age 65 to almost age 66).

There is a lot of information out there about what a permissible Normal Retirement Age is. IRC 411(a)(8) says that a plan cannot have a NRA later than 65 & 5. The plan I am looking at has a NRD that is the last day of the plan year (December 31) in which 65 & 5 is met. So, for someone born on January 1, the NRD would basically almost be age 66 for them. Typically, plans define NRD as the first of the month coincident with the attainment of NRA. This has the same issue as the one noted above, in that someone born on the 2nd day of the month would have a NRD that is almost at age 65 1/12 and someone born on the first day of the month, the NRD would be 65. But this doesn't feel as unfair as the example above, where the NRD is practically at age 66. What restrictions are there on NRD? This might be a dumb question, but I've never had to think much about it since all the plans I've seen before have a NRD that is close to NRA.