Fielding Mellish Posted March 20, 2015 Posted March 20, 2015 Defined contribution plan that says that a Participant may take a distribution if he doesn't have any employer contributions made to the Plan for 6 months. Can a Plan provide that, upon this occurrence, the Participant may elect any of the forms of benefit offered by the Plan? For example, if the Plan offers non-periodic installments, can that be offered for this termination benefit? So if the Participant has a $100,000 balance, if he doesn't have contributions for 6 months, can he apply to take out $20,000 and leave the other $80,000 in the Plan? Thanks. You cannot bash in the head of an American citizen without written permission from the State Department.
My 2 cents Posted March 20, 2015 Posted March 20, 2015 Just wondering (as someone who does not handle defined contribution plans) - is that kind of provision allowable? And wouldn't 6 months be an awfully short time frame? It all sounds almost like a pretext for allowing in-service distributions when they would otherwise not be permitted. And of course, with respect to the actual question, the standard mantra applies - what does the plan say? Always check with your actuary first!
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