In-service distributions from money purchase plan assets that were merged into a PS/401(k) plan

[katieinny]

A money purchase plan was merged into a PS/401(k) plan several years ago. The MP plan did not allow for in-service distributions. The PS/401(k) plan was recently amended to permit in-service distributions after age 59 1/2. Will the participant be permitted to take an in-service distribution from the entire vested balance?

[QDROphile]

No. Normal retirement age or later for the money purchase money.

[katieinny]

Okay, but once the participant reaches NRA, the distribution can be processed if he or she is still working?

[Kevin C]

Didn't PPA section 905 allow for in-service distributions from money purchase and DB Plans at age 62, starting in 2007?

[QDROphile]

Yes, section 905.

[katieinny]

That's good news. So if they adopt an amendment allowing for in-service distributions at age 62, the MP assets can be distributed? Or, is it something that automatically went into effect and therefore doesn't need a plan amendment?

[QDROphile]

It is permissive, so the plan would have to be amended if the current plan terms do not allow the distributions. Some thought should be given to what the distributions provisions should be. Just because you can do it does not mean you should.

[thepensionmaven]

It is permissive, so the plan would have to be amended if the current plan terms do not allow the distributions. Some thought should be given to what the distributions provisions should be. Just because you can do it does not mean you should.

I believe that in order to have in service distributions at age 62, the plan's definition of Normal Retirement Age must be at least age 62.

Anyone have any sample amendments??

[emmetttrudy]

Does the fact that the MPPP was merged into a 401(k) Plan change anything? Would the in-service withdrawal still be allowed if the plan defined NRA to be age 60? And would there need to be any spousal consent?