3737 / What special qualification requirements regarding retirement age apply to pension plans but not to profit sharing plans?
Pension and annuity plans are retirement plans; thus, they must be established primarily to provide definitely determinable benefits at normal retirement age.
The normal retirement age in a pension or annuity plan is the lowest age specified in the plan at which the employee has the right to retire without the consent of the employer and receive retirement benefits based on service to date at the full rate set forth in the plan (i.e., without actuarial or similar reduction because of retirement before some later specified age). Normal retirement age must 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.1 The following table describes the standard by which the IRS will determine whether a normal retirement age is reasonable:2
| Normal Retirement Age | Standard Applied |
| 62 or above | Deemed reasonable |
| Between ages 55 and 62 | Depends on facts and circumstances or workforce |
| Under age 55 | Deemed unreasonable unless Commissioner determines otherwise |
| Age 50 and later | Reasonable, if substantially all of participants are public safety workers3 |
The IRS has announced its intention to modify this rule to eliminate the requirement that substantially all of the public safety workers be covered by a separate plan.3