distributable event

[Scuba 401]

plan sponsor is a member of a controlled group but maintains its own stand alone plan. an employee terminates his employment with the plan sponsor and goes to work with another member of the controlled group. the plan says you do not have a separation from service if you are working for a related employer. i am thinking the employee does not have a separation from service even though this related employer is not participating in this plan and thus the employee can not receive a distribution. am i correct in my thinking?

[rcline46]

yes

[Scuba 401]

yes

so the participant starts participating in the plan of her new employer and maintains her account in the old plan? is there any way to get her a distribution besides amend the plan to allow for in service distributions?

[rcline46]

Trustee to trustee transfer. Bet it is in your documentS, yes plural. Not under distributions, but usually found in the trust section!

[Scuba 401]

Trustee to trustee transfer. Bet it is in your documentS, yes plural. Not under distributions, but usually found in the trust section!

but a trustee to trustee transfer would only consolidate her account. she still wouldn't be able to get a distribution.

[masteff]

is there any way to get her a distribution besides amend the plan to allow for in service distributions?

You switched from "he" to "her" so I presume you have a specific employee pushing you on this. Explain that this is a common occurance in control group situations. Blame it on Congress, the IRS and the people who abused the system that caused the rules in the first place.

Does your plan allow loans while at a related employer? I was about to suggest that but realized it might be a document issue or at least a payroll/payment collection issue.

[Scuba 401]

is there any way to get her a distribution besides amend the plan to allow for in service distributions?

You switched from "he" to "her" so I presume you have a specific employee pushing you on this. Explain that this is a common occurance in control group situations. Blame it on Congress, the IRS and the people who abused the system that caused the rules in the first place.

Does your plan allow loans while at a related employer? I was about to suggest that but realized it might be a document issue or at least a payroll/payment collection issue.

same employee had a sex change. just kidding. i inadvertently switched to female.

[masteff]

employee had a sex change

That would be a medical expense and qualify for a hardship distribution.