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Distribution timing

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For a calendar year plan, say 12/31/11, we typically get the stock price in June and do the annual recordkeeping. The Distribution Policy states that the Plan will designate a distribution date and make distributions once per year following the annual valuation.

If a participant terminates employment subsequent to 12/31/11, and submits his distribution request at approximately the same time as the "distribution date", would that person be paid out on his 12/31/11 value or since he terminated in the new plan year, have to wait until the 12/31/12 valuation is done?

Is there ever a time period or deadline where someone is made to wait until the following year? Say if someone terminates 12/20/12. Can he get his distribution request in and get paid on the 12/31/11 value even though it's past the "distribution date". Or what about July, August or September?


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Check the plan document.

For example, some plan docs say you cannot receive your distribution until next year (after the end of the plan year in which you terminated) unless you qualify for early, normal, or late retirement, in which case you are eligible to receive the distribution as of the first of the month next following or coinciding with your retirement date. The plan doc may specify that the distribution in each case will be based on the most recent end of year share price valuation.

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In the document the timing of distributions refers to the Distribution Policy which states that the Plan will set a "distribution date" and make distributions once a year.

In this case we completed year-end work in May, made the distributions we had direction for in early June and then another one showed up in late June. We held onto that one for payment next year and am now told that this was incorrect by their legal counsel and plan document provider. I'm not sure we were wrong in holding onto that one.

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