Supplemental Pension question

I received a call from a client that has a supplemental pension, he just turned 54 has separated from the local union that is providing the pension, he is looking to cash in the pension and use the proceeds to put in an in ground pool. Told him that I would look into it but I also advised him that I was pretty sure that he would have to pay a 10 % penalty plus taxes. Him as his wife made about $130k last year and expects to make that this year.
I know that there are curtain ages ranges where individuals can elect to have a lump-sum payout. Is there any hard and fast guidelines or does it depend on the bylaws?



There is a penalty exception for distributions taken in or after the year taxpayer separates from service at age 55, so he is one year short of meeting that exception. The  pension provisions govern when distributions can begin, but this has no effect on the 10% penalty. He therefore faces tax and penalty unless he qualifies for another penalty exception.



That is what I was thinking, thank you 



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