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Posted

A 56 year old 401(k) plan participant terminated his employment in May after working with the company for over 30 years.   He was rehired in July to a position that is not an eligible class for participating in the plan so he is considered an inactive participant.    He did not request his distribution during the time he was gone, but of course now he wants it.     The plan does not allow in-service withdrawals and is silent on the subject of a rehired participant taking a distribution due to the prior separation of service.     I don't believe he is eligible for the distribution now.  Other than amending the document to allow for in-service, can anyone give me some guidance on this or a regulation?

Thanks for the help.

Posted
22 hours ago, PensionPro said:

You are correct that he is an active employee and may not be paid as a terminated employee.  

Agree 100% . It's his problem; don't make his problem your problem!

Lawrence C. Starr, FLMI, CLU, CEBS, CPC, ChFC, EA, ATA, QPFC
President
Qualified Plan Consultants, Inc.
46 Daggett Drive
West Springfield, MA 01089
413-736-2066
larrystarr@qpc-inc.com

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