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In-Service distribution from 401(k) that includes terminated DB rollover


Tom

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Client had a DB plan and terminated it and rolled his balance to his 401(k) plan.  This was not a merger and transfer.  It was a termination and he electively rolled to his 401(k) plan, waived annuity, spouse waived annuity.  We are showing it in the 401(k) records as an unrelated rollover.  Now he wants to do a big in-service distribution to a Roth IRA.  He is 57.  the plan document allows for in-service distribution of rollover source funds at any time.   I asked the former actuary who says the DB rollover lost its nature as pension when electively rolled into the K plan and so in-service is allowable.   Part of the rollover source is SEP as well.  And so the same question applies to in-service from a rollover source that resulted from a former SEP.

Summary - can a 57 year-old can he take as in-service part of his 401(k) rollover account which resulted from a terminated DB plan? 

Thank you!

Tom 

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My two cents and to quote some famous people on the boards..."what does the plan say"?  I would think if the DB and or SEP balances are effectively "rollover" balances in the 401(k), then unless the Plan Doc states something different for the origin of the rollover source funds, the rollover assets can be rolled out according to the plan in-service provisions for that money type.   

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