Guest Don J. Smith Posted December 17, 1999 Posted December 17, 1999 1) If a active employee/participant turns 70 1/2 must they start taking distributions from the 401(k). 2)Can they keep making elective deferrals. 3) Do they share in Profit Sharing Contributions. 4) Are there manditory distribution requirements on Profit Sharing at 70 1/2 from the plan.
david rigby Posted December 17, 1999 Posted December 17, 1999 As is very often the case, it is important to see what the plan document has to say about any issue. With this particular issue, it is important to see if there have been any recent amendments on this issue. All qualified plans (DC and DB) were required to commence benefits to any participant who attained age 70-1/2. Latest such commencement date is the April 1 after the calendar year in which the particicpant attains that age. Note that plans could, and some did, have an earlier commencment date. The reference above to amendments is that the law has been changed recently: the 70-1/2 requirement must still apply to 5% (or more) owners but is not required for others. However, if the plan has not been amended, or the plan sponsor has not yet specified how it intends to amend this provision, then the existing plan provisions still apply, even to those who are not 5% owners. [This message has been edited by pax (edited 12-16-1999).] I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
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