Coronavirus-related relief for retirement plans

[Renafesq]

Does anyone know whether this guidance is still reliable?  I thought there was a sunset on this, but looks like it may still be applicable.  Specifically, I am wondering if a governmental employee may take an in-service distribution before age 59 1/2 since the plan allows for earlier retirement age (age 53). (See Q&A #2). TIA

 

https://www.irs.gov/newsroom/coronavirus-related-relief-for-retirement-plans-and-iras-questions-and-answers#:~:text=Q2%3A May a qualified pension,the plan's normal retirement age  

[Luke Bailey]

There are rules for determining whether an age younger than 59-1/2 qualifies as an acceptable normal retirement age in a governmental plan. Your post, Renafesq, does not provide any facts to determine whether that is the case, here.

Q&A-2 has nothing to do with the Coronavirus distribution rules, btw, which have lapsed.

[Renafesq]

Thanks Luke. My Question isn't about whether an earlier retirement age in a governmental plan is acceptable. I didn't provide those facts bc they aren't relevant to my question, so my apologies for being unclear. I'm wondering if  my client can rely on Q&A 2 of that coronavirus related guidance I included in my question, which allows an in-service distribution at age 59 1/2 or the plan's normal retirement age. My client's plan has a NRA of 53.

Q&A2 states the following: A qualified pension plan generally may allow individuals to commence in-service distributions if the individuals have attained either age 59½ or the plan's normal retirement age.

Is this still good or has this now lapsed? If it is good, can my client rely on this to allow an employee who is age 53 to take an in- service distribution?  If it has lapsed, can you show me where I can find proof that this has lapsed? TIA

[Luke Bailey]

Renafesq, although the IRS put the Q&A you cite under the rubric of Coronavirus assistance, the Q&A has nothing to do with the Covid statutory and regulatory relief. The IRS was merely trying to be helpful by pointing out that the Code, as amended by SECURE Act, permits in-service distributions at 59-1/2, independent of Covid relief. In the same Q&A it also points out that the regulations cited in the Q&A permit in-service distribution even earlier if the plan has an earlier normal retirement age.

Whether 53 is a permissible NRA would require analysis of the actual employer. Generally, the final regulations would permit an NRA of less than 55 only for public safety employees fitting the definition of such under the applicable regulations.

[Renafesq]

Ok. That clarifies a lot for me. Thank you SO much!