By Paula Aven Gladych
The IRS and the Treasury Department would like to issue guidance relating to the applicability of the normal retirement age
rules to government plans. The agencies are inviting public comment on the guidance under consideration, which would clarify that governmental plans that do not provide for in-service distributions before age 62 do not need to have a definition of normal retirement age and would modify the age-50 safe harbor rule for qualified public safety employees.
The notice also provides that the IRS and Treasury Department intend to extend the effective date of the regulations relating to distributions from a pension plan upon attainment of normal retirement age for governmental plans.
The IRS and Treasury Department intend to modify provisions of the 2007 NRA regulations as applied to governmental plans in two ways. First, the regulations would be modified to clarify that a governmental plan that is not subject to 411(a) through (d) and does not provide for the payment of in-service distributions before age 62 will not fail to satisfy the requirement that the plan provide definitely determinable benefits to employees after retirement or attainment of normal retirement age merely because the pension plan does not have a definition of normal retirement age or does not have a definition of normal retirement age that satisfies the requirements of the 2007 NRA regulations.
Second, the IRS and Treasury Department intend to modify the 2007 NRA regulations with respect to the age-50 safe harbor rule for qualified public safety employees. According to the 2007 NRA rules, in the case of a plan in which substantially all of the participants are qualified public safety employees, a normal retirement age of 50 or later is deemed to satisfy the requirement that a pension plan’s normal retirement age be an age that is not earlier than the earliest age that is reasonably representative of the typical retirement age for the industry in which the covered workforce is employed.
The IRS and Treasury plan to amend the 2007 NRA regulations to change the effective date for governmental plans to annuity starting dates that occur in plan years beginning on or after the later of Jan. 1, 2015, or the close of the first regular legislative session of the legislative body with the authority to amend the plan that begins on or after the date that is three months after the final regulations are published in the Federal Register.
Originally published on BenefitsPro.com