Looking at document restatements Retirement age 62 or 65?

[Jim Chad]

What advantages do people see to having 65 for retirement age?

if you have 62 and 5 years, then vesting is almost the same.

If retirement age is 62, then you could force out termed Participants at age 62.

What are you all doing?

[Flyboyjohn]

Until you mentioned it I would have said 65 but now I'm gonna do 62 so I can force out terms, good idea

[shERPA]

DBs and combo plans may want to use 65 sometimes. If the owner's going out at 65 anyway, using 65 means less cost for TH minimum benefits which are determined as of NRA.

And with combos, testing age often works better at 65. If we want the max 415 DB for the owner at 62 the DB will be at 62 but we may use 65 on the DC so the combo can be tested at 65, and we're fulfilling TH in the DC so that's not an issue. The minimum 0.5% benefit for 401(a)(26) is a tad more valuable at 62 than 65 but that (and passing with higher EBARs and MVARs) is the price of getting the owner the full 415 at 62.

[Tom Poje]

basically same as Sherpa pointed out, if plan is cross-tested and especially if combined with a DB plan then the extra 3 years in testing makes a big difference. In a stand alone DC plan and cross tested you are probably helped some at age 65 when you impute disparity is testing.

at age 65 the factor added to most NHCEs would be .65, but age age 62 is only .50

[My 2 cents]

Cannot "force out" participants at NRA under a db plan. Cannot force a lump sum under a db plan if over $5,000. You must be thinking of some other kind of plan.

[Jim Chad]

Correct. I am talking about 401(k) Plans which are the only document work I do. (Some Profit sharing)

[Jim Chad]

Can I have retirement age of 62 in my document and do all of my testing using age 65?

[John Feldt ERPA CPC QPA]

It won't make a difference in the results for most plans, but what does 1.401(a)(4)-12 say under "Testing Age"?

It says if the plan provides the same uniform normal retirement age for all employees, the testing age is the normal retirement age.