Minimum Distribution Requirements To A Retired Re-Hire.

[Guest hilda]

Is a non-5% owner employee who retired at NRA (65) & took a 100% lump sum distribution at that time entitled to continue to receive employer QNEC contributions annually? The employee was re-hired within a month of the retirement and is now age 70.

The plan is a 401k profit sharing plan. The employer has never used the 401k feature, and since plan inception has only made 10% of comp QNEC contributions annually. The plan's eligibility requirements are: 6 mos of svc & no age requirement. What are the ramifications under 401(a)(9), if any?

[david rigby]

Probably need to determine first if the rehired employee is entitled to re-participate in the plan. Sounds like the EE meets the age and service requirements. Is there an hours requirement, either to get in the plan or to receive an allocation?

[Guest hilda]

No...no hours of service requirement to enter the plan OR to receive an allocation. Even terminated employees - regardless of the # of hours worked (once 6 mos of svc have been completed) receive an allocation.

Also, failed to mention in my original post that the plan is silent with respect to re-hires.

Am real concerned about any issues with respect to minimum distribution requirements under 401(a)(9).

[david rigby]

Sounds like this EE is eligible to participate in the plan and receive an allocation. The rehired status or current age should not have an impact on that. Your plan provisions will determine whether this EE must receive a distribution following age 70-1/2.