Answer:
The law allows you to waive early withdrawal penalties on IRAs after the customer reaches age 59 1/2 it does not require you to waive them.
Take a close look at the IRA plan and plain language disclosure you gave at the time the account was opened. If it is silent on the point or says only that penalties "may" be waived, then it's up to your policies.
First published on BankersOnline.com 9/2/02