Determining XRA under ERISA 4044

[Guest HarveyC]

Just wanted to clarify an earlier post (which may have been a little confusing).

I'm a little confused with the determination of the expected retirement age (XRA) for a participant under ERISA 4044.

4044.55 deals with the XRA when a participant must retire from his job to begin receiving an early retirement benefit. 4044.56 deals with the XRA when a participant need not retire from his job to begin receiving an early retirement benefit. This latter situation does not appear to make sense (and would never apply) as in-service distributions are not permitted prior to normal retirement age.

[MGB]

Note you are talking about calculations upon the termination of a plan. Once the paln is terminated, the distribution need not be conditioned on termination of employment.

In some cases, the plan administrator and the group annuity provider will continue to monitor employment status. That is the first kind (needs to be terminated to receive).

Most situations are the second, i.e., there does not need to be a termination of employment and the insurance company does not monitor employment status. (Note that this will also depend on the person attaining the requisite service prior to the plan termination date, whereas in the first case it can be arranged to continue to monitor service and grow into eligibility.)

If the plan is taken over by the PBGC, they will not monitor employment status, so their early retirement benefits are available while still employed.