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Showing results for tags 'in-service distributions'.
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A defined contribution plan has an age 72+ Active Participant who is not a 5% owner, who would like to receive an in-service distribution which the plan permits. Required Minimum Distributions are generally required for non-5% owners in this plan upon the later of the year that he or she reaches 72 (70 ½ if you reach 70 ½ before January 1, 2020), or, the year in which he or she retires. Q: The question is whether or not a Required Minimum Distribution is necessary since the Active Participant is beyond Age 70.5/72 but has not retired and does not intend to retire this year?
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Code Section 401(a)(20) permits a terminating defined benefit plan to distribute benefits to active employees "within one year" of the termination date. If the assets aren't distributed within a year, the plan isn't considered "terminated." If all trust assets are distributed (within a year) through the purchase of a deferred annuity contract, can that annuity contract retain the in-service distribution option, so that active employees can receive distributions beyond the one-year period? I can't find any guidance on this question. Cheers.
