Can Normal Retirement Date require more than 5 years of service?

[Guest michaelv]

When setting a Normal Retirement Date (NRD) in a DC Plan (or any type of Plan for that matter), can more than 5 YOS be used? For example, can NRD be defined as age 62 with 26 YOS?

I have not previously encountered any plans requiring more than 5 YOS. The document of a prospective client that I am looking at shows the above NRD provisions. However, the document is signed in June, 1991, and I am suspecting it is a pre-TRA 86 document. No determination has been provided (yet).

Thanks for any comments.

[Guest Hans Moleman]

You can define NRA as whatever you want, but the plan no longer has a uniform retirement age. Therefore, you have to test the accruals under 401(a)(4) using a uniform testing age.

[david rigby]

NRA is defined, at least with respect to vesting, as the age at which an employee will attain 100% vesting without regard to service. See IRC 411(a)(8). Earlier of

- the NRA as defined in the plan, or

- the later of: age 65 and the 5th anniversary of plan participation.

NRD is defined in the plan.

[Guest Hans Moleman]

I wasn't suggesting that NRA was not defined in the plan, merely that you can define it in the plan as you see fit.

[Guest PAUL DUGAN]

Pax Is correct. Many Union Plans define NRA as 30 Years of Service but in no event later than the later age 65 and 5 years of Participation.

[AndyH]

I agree completely with pax as well.