WASHINGTON (KHON2) — The Internal Revenue Service (IRS) said on Friday, it wants to help address COVID-related labor shortages by reminding employers that they generally will not jeopardize the tax status of their pension plans if they rehire retirees or permit distributions of retirement benefits to current employees who have reached age 59 1/2 or the plan’s normal retirement age.
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According to the IRS, with the COVID-19 pandemic, many employers, including governmental employers such as public school districts, are looking for ways to encourage retirees to return to the workforce to fill open positions and experienced employees to stay on the job.
The IRS created two new frequently asked questions (FAQ) to give technical guidance to public and private employers who sponsor pension plans for their employees.
IRS said the FAQs highlight existing ways that employers can meet their employment objectives and still comply with the plan qualification rules.
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For more information go to the IRS website.