What's the general approach for offering the Social Security Leveling option to terminated employees who want to start receving their benefits?

Can it only be offered to participants retiring directly from employment (between ages 55 and 62)? That way we can base the calculation on their final compensation.

Or can it be offered to any participant who terminated after age 55, and later came back to start receiving benefits prior to age 62?

I'm not very familiar with this option in general.

Generally, the plan should define the conditions. For example, will it be offered only to those under 62, or those under 65?

IMHO, this option is never cost-neutral to the plan. For that reason, I recommend against including it.

Well, it's an old plan that we are looking at and it states in the plan document that it is only available to participants who terminate after age 55, but the practice has been to only offer it to active participants who retire immediately and are younger than 62. The client is looking for justification for not offering it to those who terminated after age 55 and did not take immediate retirement but would still like that option. Unfortunately the prior actuary whose approach this was is no longer around.