Lori Foresz Posted December 18, 2014 Share Posted December 18, 2014 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. Link to comment Share on other sites More sharing options...
Jim Chad Posted December 23, 2014 Share Posted December 23, 2014 I would think you would have to require the 2 year rule. FWIW Link to comment Share on other sites More sharing options...
BG5150 Posted December 23, 2014 Share Posted December 23, 2014 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, ERPATwo wrongs don't make a right, but three rights make a left. Link to comment Share on other sites More sharing options...
QDROphile Posted December 23, 2014 Share Posted December 23, 2014 I got the IRS to approve age 40 for an ESOP (stock bonus plan, not PSP, but subject to same rules) in a determination letter filing. ESOPs have another layer of distribution rules that may have influenced the reviewer. Link to comment Share on other sites More sharing options...
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