Expert: Allen - 5/24/2008

Question
I'm 70 3/4 years old. I am applying for my union pension from the carpenters (Northern and Southern CA). They say if I continue to work in ANY phase of construction ( non-carpentry ) I cannot draw my pension (I'm vested). In an AARP article, it was stated that April 1st of the year after the 70 1/2 birthday, the pension has to be paid. The union in that question was not named and there was no reference to a specific law to use. Is that a true statement regarding a legal requirement the pension has to be paid as described above for my case?

Answer
There are two separate issues:

1. Many plans state that in order to receive a distribution, a participant must be retired. There can not be what are known as in service distributions. The upside of this is that the pension is larger if it is delayed. It sounds like this provision is in your plan.

2. The law says that under certain circumstances when a plan participant reaches age 70 1/2, he must receive what are known as minimum required distributions from his pension plan. It depends on the terms of the plan. I would write the plan administrator to verify that this is not part of your plan. I believe if you reread the AARP article it will say that a participant may (not must) receive distributions after age 70 1/2.