In service withdrawals from a money purchase pension plan

[Guest Gibson]

Can a money purchase pension plan permit in service withdrawals after the attainment of the plan's normal retirement age? Isn't there a revenue ruling that discusses this?

[KJohnson]

Yes, I believe that the consensus is that such distributions would be allowed after NRD.

Don't have a cite handy.

However, you can look to the fact that the IRS specifically allowed all Plans to keep mandatory distribuitons to currently employed partcicipants (non-5% owners) who reached age 70 1/2 even though those distributions are no longer mandatory. In essence, allowing a Plan to "mandate" in-service distributions.

You may want to look at this link:

http://www.benefitslink.com/boards/index.php?showtopic=7054

[Appleby]

By definition, an in-service withdrawal is one that is taken when there are no triggering events. Attaining retirement age as stated in the plan, is a triggering event. A distribution upon attaining retirement age is not considered an in-service withdrawal and is therefore permissible in an MPPP.

[david rigby]

Clarification:

"A distribution upon attaining retirement age is not considered an in-service withdrawal and is therefore permissible in an MPPP. "

That should be Normal retirement age, as defined in the plan.

[KJohnson]

Also, be sure to check your document. Many condition the benefit on actual retirement and not merely attaining NRA. Also, I have seen a number of MPP prototypes that do not even provide an option for in-service distributions after NRA so you may have to restate to one that does, or go the individually designed route.