Normal Retirement Age - What determines this?

[Guest Tom Bennett]

Normal Retirement Age? If there is no policy or contractual language in place by an employer, can 65 be considered as the normal retirement age, allowing a person to take advantage of the opportunity to bank more $$ during those three years prior to the normal retriement age, even if the person continues to work after age 65?

[Don Levit]

Section 411(a)(8) defines normal retirement age as the earlier of (1) the time a plan participant attains normal retirement age under the plan or (2) the later of (a) the time a plan plan participant attains age 65, or (b), the 10th anniversary when a participant started participation. Rev. Rul. 78-120. (which modified Rev. Rul. 71-147).

Rev. Rul. 71-147 says that normal retirement age is the lowest age stated in the plan in which the employee can retire without the employer's consent, at the full rate set in the plan. However, retirement benefits starting prior to age 55 may not exceed the maximum amount payable under Section 415(b)(1)(A).

It appears that normal retirement age can be decided on a plan-by-plan basis.

Don Levit

[Everett Moreland]

Normal retirement age has a special meaning for 457 plans. Those revenue rulings and 411 do not apply to 457 plans. The 457 regs define normal retirement age. You need to read those regs and the plan document definition of normal retirement age and then determine whether the employer is planning on amending the plan document definition of normal retirement age.