Qualified Public Safety Employee
A QPSE rolled his gov’t plan into a an IRA in 2010 and started taking distributions at age 50 based on lifetime expectancy. The QPSE is now 55, if he takes more than the calculated amount, is he subject to the 10% penalty? If so, is he also subject to the penalty on all prior and subsequent distributions until age 59.5?
Permalink Submitted by Alan - IRA critic on Fri, 2018-07-20 23:40
The Defending PSOs retirement Act of 2015 would not have affected the QPSE anyway if he retired prior to age 50. And it also would not affect any IRA based 72t plan, since the Act only broadened penalty free distributions for distributions from Govt Plans including DC plans such as the TSP. Therefore, there are two reasons that the Act does not affect this QPSE. He must complete his IRA based 72t plan through age 59.5 or would incur retroactive penalty and interest for distributions taken from the IRA since 2010.
Permalink Submitted by Tom Limroth on Mon, 2018-07-23 15:10
Alan – thanks for the confirmation. We had been receiving conflicting information but our research kept pointing to the client being subject to penalty.