In Service Distributions

[mjf06241972]

Can a Plan be amended to have the In-service Distribution amount less than Age 59 1/2?  In speaking with one of the the "big" payroll companies, they stated they could not change this provision but I also received a different response that a special provision can be written into the Plan (like Age 50 and 10 years of service) to allow for the In-Service withdrawal.  Thank you.

[Molly the cat]

Depends upon the plan document being used.  At least one of the "big" payroll companies that I know of has the 59-1/2 in their Basic Plan Document, so I doubt a change is allowed. 

The document I use does allow for it.  But even if you lower the age or age/service for in-service distributions, Elective Deferrals, QNECs, QMACs and any portion of any Account used to satisfy the safe harbor requirements of Code sections 401(k)/(12) or 401(k)(13) and/or 401(m)(11) or 401(m)(12) aren't eligible for withdrawal until age 59-1/2 (or 59-1/2 and completes required service if age/service). 

[Luke Bailey]

There's some old guidance that is still in effect that says that nonelective/profit sharing in a DC plan can be distributed after as little as two years. A little bit more complicated than that. As Molly the cat points out, most money types would be restricted and could not be distributed before 59-1/2, and money purchase money not before separation from service. Of course, the plan document must allow in-service distribution, many do not.