Congress has recently expanded an exception to the 10% tax penalty for early distributions (before age 59 1/2) from qualified retirement plans. Early distributions can be made with no penalty after age 55 and separation from service. The Pension Protection Act of 2006 included a provision to allow “qualified public safety employees” participating in governmental defined benefit plans — state and local police, firefighters, and emergency medical service employees – to take such a distribution after age 50.
This public safety exception has been expanded in that it will now apply to governmental 401(k) plans and will expand the definition of qualified public safety employee to include certain categories of federal employees such as law enforcement officers, border protection officers and air traffic controllers.
EBIA Weekly; July 1, 2015.