Is early retirement age a distributable event?

[ErisaGeek]

Facts:

Prototype document has the following provisions:

Early Retirement Age is 62.

Normal Retirement Age is 65.

In-service distribution is allowed upon reaching normal retirement age.

Person A reaches early retirement age and is still employed. Person A requests for his distribution because he has reached early retirement age. However he is still actively employed. Can he take a distribution and roll over all his money out of the 401(k) plan?

My feeling says no because he has not terminated service. He has basically just reached the early retirement age and the plan document does not allow in-service distribution until age 65. Am I on the right track or am I making this too complicated?

Thank you for your help.

[RCK]

Based on your recitation of the facts, you are right. Plan doc says in-service withdrawal at NRA and NRA is 65. Participant can have a distribution at earlier of termination of employment or attainment of age 65.

RCK

[david rigby]

Be careful about a "sham termination and rehire". Frowned upon.

Of course, the plan could be amended to change the definition of NRA to include (for example) age 62 with 30 years of service.