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If there is no plan restriction there is no statutory issue either, assuming all the proper tax reporting/withholding is happening. A pension plan can commence in-service monthly payments as early as age 59 1/2, so what's the big deal here? Just because something creates an administrative headache and isn't the most efficient utilization of one's account doesn't mean there is a statutory issue.

Usually one of three ways: 1. Maintain both plans separately 2. Merge the plans 3. Go back in time

1. Does the plan limit the number of in-service distributions? If not, why would it be excessive? 2. Does the participant pay a distribution fee each time? If so, might want to have a discussion with them to understand the consequences.

If the plan doesn't limit them then I don't see an issue. They are entitled to take as many withdrawals as they want if the plan doc allows it. Why would you want to limit that?

@metsfan026 you (facetiously) must really be looking forward to dealing with PLESAs (Pension Linked Emergency Savings Accounts). Four features in particular will make administering PLESAs a lot of fun: They are Roth accounts. Participants can withdraw funds at their discretion. The first 4 withdrawals cannot be subject to fees or charges. Participants can replenish the account after taking the withdrawals. This almost makes the plan you are working with seem reasonable.

In general, the required contribution in a defined benefit plan is based on the difference between the market value of assets and the actuarial present value of accrued benefits, measured on the plan's valuation date. A significant decline in the market value of assets could result in an increase in the plan's required contribution (conversely, a sudden rise in the value of plan assets could result in a reduction in the maximum contribution, possibly to the dismay of an employer who was looking forward to a large tax deduction). The increase in the required contribution due to a drop in plan assets may not be dollar-for-dollar however, as the "funding shortfall" amount is amortized over a period of 15 years. This only speaks to the minimum required contribution under ERISA 303 / IRC 430. Plans may have a funding policy that directs the employer to contribute an amount larger than the required minimum. Cash balance plans may use an interest crediting rate based upon the actual rate of return of plan assets, which may even be negative (although the "preservation of capital" rule of 26 CFR 1.411(b)(5)-1(d)(2) prevents the interest credit rate from being negative on a cumulative basis). Proponents of these formulas claim that it ensures that plan liabilities will always be in line with assets; in other words, if the sponsor contributes the amount of the pay credits each year, then the assets will always equal the hypothetical account balances. This may be true, however it can be problematic for smaller plans, especially those that are tested together with a DC plan.

Verily, and with great haste, thou shalt consulteth thy plan's governing documents and discover therein the answers thou seekest. Should fortune smile upon thee, thou may findest that thy plan be graced with a determination letter, be it sealed by the hand of the wise ones who dwell within the halls of the Internal Revenue Service, granting reliance upon the terms found therein. In that happy moment, thou shalt knowest that thy plan's allowances of in-service distribution of rollover accounts shall never be said to fail to satisfy the requirements of section 401.

Is it actually a new plan? In other words, did you terminate the Vanguard plan, or are you simply transferring the funds to a new company? If old plan is terminated (and you've waited the requisite 12 months to start a new plan) then it should be 002. If you're just switching companies then the Plan Name should remain the same and the Plan # should still be 001 (because it's the same plan).