In-Service Distributions

[Guest kowen]

Is anyone aware of a cite in the regs that deals with in-service distributions from a DB or money purchase pension plan. 1.401-1(b) is all I've been able to find so far. Most people I've spoken to say no in-service withdrawals are permitted and others say participants may be permitted to withdraw after-tax contributions. Thanks in advance.

[four01kman]

I don't have a cite for you, but my recollection is that (1) if the employee after-tax contributions are "voluntary" and maintained in a separate account they may be withdrawn if the plan allows, but (2) if the employee after-tax contributions are "mandatory" and, therefore an integral part of the accrued benefit, no withdrawals would be allowed.

[Guest kowen]

Thank you for the response. These are voluntary after-tax contributions to a money purchase plan which are accounted for separately. Revenue Ruling 60-323 seems to suggest that voluntary contributions to a pension plan can be withdrawn if no interest is allowable. I wonder how that would translate to a money purchase plan with investment losses in participant directed accounts.