Distribution of life insurance policy

[Guest sammy]

A participant in a qualified plan can't own life insurance in the plan after he or she retires. The required beginning date under Section 401(a)(9) is the calendar year following the later of the calendar year in which the participant attains age 701/2 or retires.

Does anyone have a sense of what the IRS thinks it means to "retire" in either situation, particularly in the case of a self-employed individual? Is working one day per month enough? What about less?

Has anyone had any experience with this issue on audit or have a sense of the IRS's position on this?

Thanks?