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Maximum Age Plan Entry Date Limitation

Guest Jhagan

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We have a plan that has a provision that states" Any other Employee shall be eligible to become a Participant at the beginning of the first month following completion of a Year of Service; provided, however, no such Employee shall become a Participant who had attained the age of Sixty (60) years when his service commenced."

Is this provision legal? If it is not, and the plan has not been amended to removed it, how is it applicable?

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It depends. The language you quoted is "old" and was common prior to 1988. The age limitation was eliminated in 1987 (I think the statute was OBRA 87), effective with the first plan year beginning in 1988. So, in most cases, that portion of the sentence you quoted is no longer valid in a qualified plan.

However, there is an exception. The particular IRC section that no longer permits the age exclusion is IRC 411. Certain plans are exempt from that section, including governmental plans. I have seen a couple of such plans recently that do have a maximum age provision.

[This message has been edited by pax (edited 02-03-99).]

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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