STJ Panuthos finds that Dale W. Laue and Alicia Laue, 2020 T. C. Sum. Op. 14, filed 4/20/20, unlike Rudy Kipling’s hero Exeter Battleby Tring, is not exempt from the Law of Fifty and Five.

The Law of Fifty and Five for STJ Panuthos is Section 72(t)(2)(A)(v). That says that distributions from a qualified retirement plan (in this case Dale’s pension from his ex-employer) are exempt from the 10% whatever-it-is if “made to an employee after separation from service after attainment of age 55.”

Dale got laid off years before, but thirteen (count ‘em, thirteen) years thereafter, he took a lump-sum pension payout from the successor to his former employer.

Y’wanna hear a hard-luck story? I’ve heard ‘em by the bushelbasketful, but Dale‘s is a first-class bummer. Ya see, Dale got the $25K payout and cashed the check when he was 59, but not yet 59-1/2.

I know what I would have told Dale if he’d asked me before, but I will keep that to myself. And I’m sure in such case my readers (if any) will shoot out their lips and wag their heads, saying nothing.

But STJ Panuthos must go by the letter of the law.

“When we interpret a statute, our purpose is to give effect to congressional intent. To accomplish this we begin with the statutory text, which is the most persuasive evidence of the statutory purpose. Statutory text is ambiguous where ‘the ordinary and common meaning of the statutory language supports more than one interpretation’. Where ‘statutory language is ambiguous, * * * we may consult legislative history to assist us in interpreting the language in question.’ We may also consult a statute’s history to assure that a plain meaning application of the statute’s text does not ‘thwart the purpose of the overall statutory scheme or lead to an absurd or futile result.’” 2020 T. C. Sum. Op. 14, at pp. 5-6. (Citations omitted).

The Conference Report lays it out: “In all cases, the exception applies only if the participant has attained age 55 on or before separation from service. Thus, for example, the exception does not apply to a participant who separates from service at age 52, and, pursuant to the early retirement provisions of the plan, begins receiving benefits at or after age 55.” H.R. Conf. Rept. No. 99-841 (Vol. II), at II-456 to II-457 (1986), 1986-3 C.B. (Vol. 4) 1, 456-457.” 2020 T. C. Sum. Op. 14, at p. 6.

Poor Dale, who was laid off at age 46, is clearly not exempt from the Law of Fifty and Five.