Pension buyout lump-sum rolled over and under 59 1/2

[Florida1]

58 year old retired participant was receiving monthly pension payments. Then he accepts pension buyout lump-sum and rolls it to his IRA. CPA says he must do a 72(t) subequal on his IRA until attaining age 59 1/2 to avoid the 10% premature distirbution penalty on the prior pension distributions. Correct?

[david rigby]

Does IRC 72(t)(2)(A)(iv) help?

[masteff]

Does IRC 72(t)(2)(A)(iv) help?

Did you mean (v) rather than (iv)? "(v) made to an employee after separation from service after attainment of age 55"

[david rigby]

No.

(iv) part of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the employee or the joint lives (or joint life expectancies) of such employee and his designated beneficiary

[masteff]

Agreed, (iv) is why he'd need to continue doing distributions.

(v) is a reason why he might not have to (depending on age at separation from employment).