Distributions and Rollovers

[Guest mrwentzel]

The situation is as follows: A terminated employee, 100% vested in a 401(k) profit sharing plan wants to rollover their account to an IRA. The plan document says that "distributions will be made on the sixtieth day of the first plan year beginning after you terminate, or as soon as administratively practicable following that date".

The question: With all the new law is the plan document still legal? Is there a law requiring a plan to be timely or "as soon as administratively possible" on distribution and rollover requests from terminated employees? If the 401(k) plan is in a daily valuation environment, why would they not be able to cut checks more often than once a year?

[WDIK]

It is legal for a plan to impose restrictions on the timing of distributions, such as a certain number of one-year breaks-in service, retirement age, etc.