In Service Non-Hardship withdrawals

[mlp0816]

Can a 401(k) plan be ammended to allow in-service non-hardship withdrawals to any participant under the age of 59 1/2 so that he or she can cash out or roll the funds to an IRA? Client wants to use as a retention tool.

[Jim Chad]

This would be possible for the discretionary or fixed match and the discretionary nonelective portions. But the QNEC, QMAC, SHNEC, SHMAC and Deferral portions are all locked into the plan until termination of employment or age 59 1/2 (with the 2 exceptions: hardship and loan).