Say a plan has a normal ret date of age 50 and the plan allows for in-service distributions after normal ret.

One participant plan.

Say the PVAB at age 50 is $500,000.

Is there any reason why the plan cannot allow for the participant to withdraw say $50,000 one year, then say another $25,000 in three years, etc. as long as the participant does not exceed 415 and meets RMD?

All the distributions will be rolled into an IRA. Otherwise, I believe there would be 10% penalty for early distribution, since this is not a periodic annuity type of pension.

Thanks.
Gary

There are a few problems with this but the first is that these payments, at least the $25K ones, would not qualify for rollover treatment because they would be part of a series payments lasting over more than 10 years. The first may have the same issue.

And you've got document issues as well as the issue of whether or not the NRA is justfiable.

As Andy points out, there are problems with your facts/assumptions:
a. NRD of 50 is likely a problem;
b. In-service distributions may be a problem for a DB plan;
c. Distributions before 59-1/2 will be subject to 10% penalty;
d. Distributions are not eligible for IRA rollover treatment;

However, with that said, there is no legal reason why a plan cannot allow for the participant to withdraw amounts at the participant's discretion, so long as the amounts fall within legal minimums and maximums.

I don't necessarily know any reason why NRA of 50 is a problem, but it does seem evident that the eligible rollover aspect need be addressed.
Thank you.
Gary

I disagree that there is some question as to whether the payments are eligible for rollover.. the fact that a participant made 3 consecutive elections to take a partial distribution of the same amount does not constitute a series of substantially equal payments. Each of these payments is paid as of a separate annuity starting date. Think about it...when does the first payment become part of the series?/ After the second one is made? after the third. Each ASD is, IMHO, evaluated separately.. and I think, in this case, each is eligible for rollover

I think this comes down to the document and what is in fact being elected but absent that I do not agree that these would qualify for rollover treatment because presumably they are separate elections, with separate series of payments of either equal amounts or payments over a defined period of time which would appear to be more than 10 years.