Rollover Distribution to an IRA

[betheeg]

Can a terminated participant receive a distribution from a 401(k) plan that is to be rolled over into an IRA, "hold" the money for 59 days, then make the deposit to the IRA? (The person wants use of the money in the meantime). I don't like the situation, but is there any rule against doing this? I should also mention it is one of the trustees of the plan.

Thanks for any help.

[jevd]

If its Rollover eligible, then its subject to mandatory 20% withholding and it complicates the rollover process. Better to do a direct rollover and then use the 60 rollover window from a distribution out of the IRA. I can't address the trustee issue. I would assume that if there is a distribution event under the plan, then it would be ok. There are others on this board that may be able to address that issue.