Expert: Allen - 7/5/2007

Question
My company's defined benefit plan allows employees to continue to work past 65.  At 65 the employee can, but does not have to, receive a lump sum of all benefits in the plan and can roll them directly into an IRA.  

As the employee continues to work he will continue to accumulate retirement compensation credits that will be paid into the employees plan account and earn interest at the plan rate (November 30 year T Bill).  The funds accumulating in the plan must be withdrawn annually.  The Question I need answered is: Can the post 65 funds be annually rolled directly into an IRA?  I have been led to believe 29CFR2530.203-3 may be relevant, I do not feel comfortable with a decision after reading and re-reading it.  Thanks for your assistance.  

Answer
I apologize for the delay in writing you. I also apologize because I can not give you a definitive answer.

The regulation you refer to deals with the suspension of pension benefits upon reemployment of retirees. It provides conditions whereby a company can discontinue payments. It does not deal with payment and rollover of benefits when they are not suspended. Therefore, I do not believe it is relevant.

I believe the payments after age 65 can be rolled to an IRA. However since I don't deal directly with this type of situation, I can't say this definitively.

I suggest asking your employer.