Adoption Agreement stipulations and insurance

[Guest caddieadmin]

Two quick questions.

Is it possible for a participant to receive distributions from a Voluntary Contribution's Account or a Rollover Contribution Account at any time? (meaning, is there a penalty if a distribution is made before the participant is 59 1/2 years old)

And as far as plan fiduciaries go (trustee's, plan administrators, etc), is there insurance out there to protect against lawsuits? I know in the Health and Life insurance fields there's "errors and omissions" insurance. Is there something similar out there?

Thanks so much.

[J Simmons]

The 10% penalty will apply on withdrawals before age 59 1/2 (with certain statutory exceptions provided in IRC sec 72). In addition, the plan document may restrict the timing for which the employee may withdraw the accounts you mention. That's why someone considering rolling prior benefits into a new employer's QRP ought to find out what the distribution restrictions are of that QRP before doing so.

Also, there is insurance available of the type you mention, in addition to the ERISA bond required for QRPs.