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The plan's written document allows in-service at NRA for ALL accounts, and NRA is 55? If so, does that plan have an IRS D letter, an advisory letter, or an opinion letter? I would think the plan, assuming it's a tax-qualified plan, would also have language stating something like, "regardless of anything you might have seen written in this here plan elsewhere, there ain't no way any participant is gettin' an in-service distribution before age 59.5 from them elective deferrals, safe harbor, QNECS, or QMACs, unless the distribution is for hardship or disability, or if its a qualified reservist distribution of elective deferrals." Probably not worded exactly like that, but you get the idea.

You are. I'll also guess that the plan doesn't really provide for such distributions - somewhere in the plan it'll probably say "notwithstanding the in-service distribution provisions" or something that makes it clear that such distributions aren't permissible.

[Putting on my payroll hat] While the employer may save in FICA currently on premium amounts, it might regret when there is an actual claim and a third party is paying out disability payments that are now taxable to both the employee and employer ( and FICA has to be considered at that time)......so more headaches from a payroll/W-2/tax form standpoint than a benefits standpoint. So you need to weigh current FICA savings with future FICA payments to truly see if there is a savings. If communicated well, the current taxes paid on premiums will be much smaller than the taxes paid on the wage payments should they then be taken. I would wait until an open enrollment and make the change as part of all that year's benefit changes/communications. That said, allowing a choice does mean that payroll has to have one taxable and one non-taxable deduction setup for a single benefit. Not tough, but can lead to mistakes, etc. So I tend to lean on doing it one way for all employees.

Courtesy is not a requirement, but it might be a good reason.

A blackout seems unlikely, but if there is one, the usual 30 day advanced notice requirement would apply. The ESOP freeze likely affects information in the SPD, so an SMM or a new SPD may need to be sent to participants no later than 210 days after the close of the plan year of the change. I can't think of anything else that might require a notice. Of course, they may have other reasons for wanting to notify participants about what is going to happen.

Well as one who has viewed this twice, I will chime in. I came back to see what others had posted. What did go through my mind was how the employer is viewing this as a burden. With the wide acceptance of Section 125 and 401(k) plans, I suspect most people know about pre and post tax. The amount of eduction should be very little. Additionally, why would an employer want to create the impression of favoritism within their organization. At some point someone is going to cause an issue with it. Just my two cents.