IRS 2002-62 Impact on Maximum SEPP Update Question

L1: IRS 2002-62 Impact on Maximum SEPP Update QuestionI accepted a voluntary severance from a major corrporation due toa work force reduction in September 2002. I defered my accrued pension lump sum until Feb 2003 assuming it would continue to grow and increase based on new mortality and Treasury Note factors. My plan all along was to begin 72-T SEPP”s at 8% interest in March 2003 based on guideance from multiple financial planning firms. I am unclear as to whether the IRS ruling truly caps the SEPP at 120% of the Federal Mid-Term Rates. If so I am very concerned. I based my voluntary separation decision on being able to draw at 8%. I still want to do so. Will this be possible?
What is even more confusing to me is that I am aware of numerous colleagues that did start their SEPP in 2002 in the 8% and 9% range. These rates apparently exceed the IRS 89-25 guidelines/rules that set the maximum at 120% of the Long-Term Applicable Federal rate. Is this a violation? What options do I have to try and draw at least 7% beginning in 2003? Will it require a meeting with the IRS?
Thank you!2002-12-17 07:08, By: Scotty B., IP: [127.0.0.1]

L2: IRS 2002-62 Impact on Maximum SEPPSection 2.02(c) makes it very clear – not more than 120 percent of the federal mid-term rate for either of the two months immediately preceding the month in which the distribution begin – the short answer is no to using the 8% rate in March unless in January or Frbruary 120% on the Mid-term jumps to 8% which isn”t very likely.
Actually 8% probably wasn”t even reasonable in September – 120% of the Long-term rate for September was only 6.29%. SEPP planusing the guidance ofIRS Notice 89-25,typically a benchmark high rateof 120% of the Long-term in the month that distributions began.
While there have been flat rates approved in various PLRs and in Notice 89-25, you also have to look at the prevailing rates when the flat rate was approved.2002-12-17 07:24, By: Gfw, IP: [127.0.0.1]