Can participant retire at age 52 but wait until age 55 to take a distr

[chris]

I ran across PLR 9135060 in which participant retired at age 50 and waited until age 55 to take a distribution. PLR stated that the distribution was not subkect to 72(t) 10% penalty. I know that PLR's cannot be cited as precedent and are only good for the specific taxpayer who requested it....... The PLR doesn't provide much in the way of reasoning, but it does get to the right result (per the participant). Anybody run across this situation or PLR before?

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[Michael Devault]

The Code, regulations and every interpretation I've seen from the IRS indicates that, in order to escape the 10% penalty using this exception, the employee must separate from service in or after the year in which he or she attains age 55.

I've not seen the PLR you cited, nor have seen reference to it in any reference service. But, I am now curious and will attempt to get a copy for review. I wonder if the penaly might have been waived due to another exception?

Thanks!

[chris]

After further checking it appears that the IRS issued PLR 9241063 about a year later as a replacement to PLR 9135060. PLR 9241063 held the 72(t) penalty inapplicable based on the substantially equal periodic payments exception. Oh well.....

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