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Profit Sharing In-Service Withdrawals at Stated Age


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Hi,

Can someone please confirm if a profit sharing plan can allow in-service withdrawals at a stated age of 40 and not place any other restrictions?

For example, NOT require the 2-year baked rule or 5 YOPS rule- only that the participant be age 40?

Help is greatly appreciated.

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From: 1.401-1(b)(1)(ii)

The plan must provide a definite predetermined formula for allocating the contributions made to the plan among the participants and for distributing the funds accumulated under the plan after a fixed number of years, the attainment of a stated age, OR upon the prior occurrence of some event such as layoff, illness, disability, retirement, death, or severance of employment.

I take the "or" as just needing a specific age. In the absence of a stated age, you'd need a seasoning clause, or restrict it to an event.

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

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