Guest Mel Kiper Jr. Posted May 16, 2011 Posted May 16, 2011 Plan allows for installments for someone who retires or terminates after age 55. Suppose someone 55 elects installments and then two years later is rehired. Does your plan stop the installments? Do you have a process for this with the recordkeeper? Does your plan allow the installments to continue for the pre-termination money and set up a new account for the rehire deferrals?
Tom Poje Posted May 17, 2011 Posted May 17, 2011 as far as I know there are no exceptions to the installment rule - even if the plan was to terminate the individual has to continue to receive periodic payments (he couldn't take everything as a lump sum at plan termination). So I don't think being rehired makes a difference, but I could be wrong.
QDROphile Posted May 17, 2011 Posted May 17, 2011 Many plans stop installment payments after rehire. Subsequent distribution is treated as a new distribution election and is governed by general distribution provisions. Other plans continue installments and account separately for new accruals. Tom's message is a good reminder to consider section 72(t)(2)(A)(iv), but your facts involve section 72(t)(2)(A)(v).
masteff Posted May 17, 2011 Posted May 17, 2011 Except for people who were under a 72(t) stream of substantially equal payments, our plans (for the most part) treated installments as a convenience for people eligible for partial withdrawals at will. My question are: What does the plan say? And absent the rehire, can the retiree elect to stop the installments? Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra
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