In Service Withdrawal after the plan is terminated

[AlbanyConsultant]

I have a plan that has terminated, but the employer is still continuing. We are now working on the final administration, etc. before payouts. A participant is requesting an in-service distribution (which was allowed by the plan). Is this still a valid request after the plan termination date? Thanks.

[My 2 cents]

You don't say what kind of plan, but I know that if a defined benefit plan terminates, the final distribution can include in-service payments to active participants. Is this not also true for terminating defined contributions (especially if the plan allowed in-service distributions outside of the plan termination context)?

[AlbanyConsultant]

It is a DC plan - should have included that.

[My 2 cents]

I don't work on DC plans, but it seems to me that if the plan has terminated, whether the employer continues or not, all plan benefits/account balances have to be distributed, even for those remaining in active service. Why would there be a problem for allowing in-service distributions for a plan that has terminated if you can do that while the plan is still ongoing?

[Bird]

I think it is valid. If it would incur an extra processing fee then I'd advise the participant of that, just as a courtesy.