Distribution allowed even though rehired?

[Guest TaxedToDeath]

A participant had a bona fide termination of employment and requested a distribution from the plan, but was rehired before the TPA processed the distribution.

I have looked at old threads on this website that talk about similar situations, but these threads give a variety of conflicting answers. So I will pose the question again:

Is distribution allowed (because it was allowed at the time it was elected)?

Or is distribution not allowed (because participant was rehired before distribution was processed by TPA)?

Citations to official (or unofficial) IRS guidance would be appreciated!

[david rigby]

Or does the plan already have language that addresses this situation?

[masteff]

Why try to split that hair knowing that the Service has gone after plans and participants in this type of scenario for being sham transactions?

http://benefitslink.com/boards/index.php?showtopic=43314

http://www.spencerfane.com/IRS-Cautions-Ag...nts-02-27-2012/