Amending a frozen MPP plan to allow for in service dist?

[kwalified]

a small FROZEN MPP plan that will ultimately be terminated in the next few years, wants to amend to allow for In Service Distributions. I do not know of any obstacles that would prevent this. Assuming the plan sponsor provided a summary of material modifications and resolved to allow for In Service this would be ok, yes?

[QDROphile]

As long as the employee is past normal retirement age.

[david rigby]

Does 401(a)(36) apply?

[kwalified]

They are not past NRA, however that age could also be amended as well to the earliest age possible 59.5, correct?

[shERPA]

Doesn't an MP run into the NRA 62 issue unless an earlier age can be justified based on industry, etc.?

[John Feldt ERPA CPC QPA]

Yes, the normal retirement age regulations (proposed as phased retirement regulations) require an age no earlier than 62 for in-service distributions from any pension accounts unless you can support an earlier retirement age as being typical for the employer's industry.

[J Simmons]

Yes, the normal retirement age regulations (proposed as phased retirement regulations) require an age no earlier than 62 for in-service distributions from any pension accounts unless you can support an earlier retirement age as being typical for the employer's industry.

I agree with the way J4FKBC articulated this.

BTW, I am just wrapping up a VCP application to correct for a profit sharing plan that had an age 55 NRA, but had merged-in MPP benefits to which the age 55 NRA applied and the 1/1/2009 deadline for raising it to age 62 for the MPP benefits was blown. The IRS has been very generous in working with us on a reasonable resolution. Better to spot these situations among your clients and go through the VCP than perhaps have a costly CAP resolution if it is picked up on audit.

[jpod]

Follow up on this, particularly concerning J Simmons' experience. I am looking at a money purchase plan that has a, shall we say, very "flexible" Normal Retirement Age. It absolutely would not pass muster under the 2007 regulations. However, the Plan does not permit in-service distributions (except for MRDs, which won't ever happen because there won't be any 5% owners), and the only relevance of the definition of NRA is to accelerate vesting for someone who would not otherwise be fully vested under the regular vesting schedule. So, can the NRA definition be whatever it is without regard to the 2007 regulations? My view is "yes."

[jpod]

No takers on my Q from yesterday?

[Belgarath]

I'll take a stab. Assuming I'm understanding your question correctly, my answer is no. The retirement age specified in the plan must be in compliance with the regulations - the fact that in an-service withdrawal isn't permitted is immaterial.