Expert: Allen - 12/10/2007

Question
QUESTION: IS IT A FEDERAL LAW THAT AT AGE 70 1/2 YOU HAVE TO START COLLECTING
MY UNION PENSION AND STILL WORK FULL TIME.
ARE THERE ANY EXCEPTIONS.
THANKS

ANSWER: Under federal law, a participant in a plan who is not an owner of the business (or in your case, the union) can delay distributions until he actually stops working. However, the plan must specifically provide for this. If the plan document says distributions begin in the year a participant reaches 70 1/2, then you must take distributions. You need to look at the plan document which is normally kept in the offices of the plan administrator.

---------- FOLLOW-UP ----------

QUESTION: my uncle is 72  and still an active employee at 70 1/2 the teamster local we work
for started paying him his pension. my mother will be 70 1/2 next month and
still works. but the union she works for is telling her active members must be
71 1/2 not 70 1/2.is 70 1/2 a federal law for active members or can each union
change the age limit or is 70 1/2 carved in stone.    thanks

Answer
It's either the year the participant reaches age 70 1/2 or the year the participant stops working. It depends on the wording of the plan document.
The 71 1/2 age may have been stated because the first payment can be delayed slightly. If an employee reaches age 70 1/2 in 2007 and the plan does not contain the language that delays payment until retirement, the first payment can be taken during 2007 or in the first 3 months of 2008.