Unauthorized Distributions in Profit Sharing Plan

[Guest Cliff Langwith]

A profit sharing plan elected not to allow distributions, for any reason, while the participant is employeed did allow 3 distributions from the plan. The plan reasoned that after age 59 1/2 anyone could withdraw their money. Each of the 3 participants rolled their money to IRAs.

May this "operational failure" be satisfied by only a retroactive amendment the plan? The plan has not been restated for GUST or EGTRRA yet.