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May 22, 2007 at 01:27 PM
The Internal Revenue Service has published an eagerly awaited final rule that could affect efforts by employers to offer more flexibility to older workers.
The final rule, “Distributions From a Pension Plan Upon Attainment of Normal Retirement Age,” affects large employers with defined benefit pension plans that want to let older employees start collecting pension benefits while working past the normal retirement age.
The definition of “normal retirement age” is important in applying pension plan rules, and it affects matters such as preventing discrimination against newer employees or lower-paid employees, officials write in a preamble to the final rule, which appears today in the Federal Register.
Officials ended up deciding to offer a safe harbor “normal retirement age” of 62.
Employers also can have a 2-part normal retirement age, which might set the later of age 62 or the fifth anniversary of plan participation as the normal retirement age, officials write.
