Employers Can Rehire Retirees Without Losing Pension Tax Breaks

Employers generally won’t jeopardize their pension plan tax breaks if they rehire retirees or allow distributions of benefits to current workers who have reached retirement age, the Internal Revenue Service said Friday.

The guidance aims to help address labor shortages brought on by the pandemic, the IRS said in a release. It highlights ways that companies can meet their employment goals and still comply with plan qualification rules.

“With the COVID-19 pandemic, many employers, including governmental employers (such as school districts), are looking for ways to encourage retirees to return to the workforce to fill open positions and experience ...