IAFF Monitoring IRS Review of Retirement Eligibility Standards

September 25, 2008 – IAFF Governmental Relations staff has been working with members of Congress on both sides of the aisle to ensure that an Internal Revenue Service (IRS) review that began in 2007 of requirements concerning the appropriate age at which public employees may qualify for a service retirement doesn't negatively affect public safety workers.

Under the proposed regulations, normal retirement age for most workers would range from between 55-62, but a special provision for public safety officers permits a normal retirement age as low as 50. However, the newly proposed regulation from the IRS has called into question the use of years of service to determine eligibility for a full pension benefit. For example, under the new regulation, a system that allows fire fighters to retire at the completion of 25 years of service, regardless of age, could run afoul of the new IRS-proposed regulations.

The IRS first published a bulletin requesting comments from interested stakeholders on this regulation, and shortly thereafter proposed a rule establishing a clear definition of “normal retirement age.”

Since the original notice was issued, the IAFF has been working with its allies in the pension community and other stakeholders to reverse or delay the regulations, which are currently scheduled to become effective on January 1, 2009.

On behalf of all stakeholders, the National Association of State Retirement Administrators (NASRA) submitted comments articulating the IAFF's position on December 28, 2007. A letter from 19 stakeholder organizations, including the IAFF, representing labor and management was sent to the IRS in April 2008.
At this point, affiliates should be aware of this pending issue, but not be alarmed. The IAFF works on regulatory issues with the IRS and other federal rule-making bodies on a regular basis. There is reason to be concerned about the issue, but it is not at a critical stage.

Most recently, Representative Earl Pomeroy (D-ND) met with IRS officials in September to urge them to delay or rescind the regulation. If IRS does not reverse itself, the IAFF is poised to take immediate legislative action during the 111th Congress which convenes in January.

The list of allies working on this issue includes many of the IAFF’s traditional allies, including AFSCME, AFT, NEA and NAPO. The IAFF is confident it will prevail because, on its side this time, the IAFF also has organizations with which it often disagrees, such as the National Association of Counties, the International City/County Managers Association, the U.S. Conference of Mayors, the National League of Cities and others. This coalition represents very powerful interests with significant sway on both sides of the political aisle.

The IAFF will keep affiliates abreast of developments as they unfold.