Normal Retirement Age under 62

[John Feldt ERPA CPC QPA]

Back in 2007/2008, the IRS released something that used the word 'deference' which we found out later really meant 'prove it'.

A prospect that still has their NRA of 55 in their document now, is concerned that they don't have a study that proves that their normal retirement age is typical for their industry. The plan allows for in-service at Normal Retirement Age.

How would you suggest fixing this?

[Andy the Actuary]

Back in 2007/2008, the IRS released something that used the word 'deference' which we found out later really meant 'prove it'.

A prospect that still has their NRA of 55 in their document now, is concerned that they don't have a study that proves that their normal retirement age is typical for their industry. The plan allows for in-service at Normal Retirement Age.

How would you suggest fixing this?

Adopt an amendment now on applicable date that modifies NRA to 62 and actuarially increases benefits multipliers (careful if integrated with SS not to exceed maximum disparity limits). Issue will be if anyone terminated to ensure he received at least as much as under the revised formula and make compensating adjustment if needed. Discuss with legal counsel.

[John Feldt ERPA CPC QPA]

By " on applicable date " for adopting the amendment, what do you mean?

Do you think a simultaneous adoption of a fully unreduced early retirement benefit at age 55 handle the multiplier issue?

No one terminated and the plan is not integrated.

[My 2 cents]

Is being able to take an in-service reduction a protected plan feature? You can make accrued benefits payable at 55, adjust the formula and early/late retirement adjustments and make it all pretty much come out the same EXCEPT for the ability to take an in-service adjustment before 62. Is that protected?

[John Feldt ERPA CPC QPA]

Is being able to take an in-service reduction a protected plan feature?

I think it is, but the IRS allowed for an amendment to remove the in-service option without violating 411 as long as the amendment was adopted within a certain time frame. I think that deadline is over now. Thus, the reason for the original post.