Distribution of Rollover Contributions

[Basically]

I think this might be a no brainer. But then there are so many nit-picky rules.   A potential new client is asking questions.  Within the email I received there is a bullet item "Rollover funds entirely".  I asked for clarity, wanted to know what the intention was.  I know they can't just dig into their plan balance and roll out employer contributions whenever they want.  That said, if they rolled money into the plan into a designated rollover account from an IRA or a balance they had as a participant in another qualified plan, can they take a distribution from those plan accounts at any time? 

Thanks

[Bill Presson]

Read the document. It will say if they can or can't. We (almost) always code plans to allow that.

[Basically]

So it's a plan design decision.  It's allowed, just has to be written in the document.  I will check the document.  

As a default I'm sure that is how I have it.  

Thanks

[fmsinc]

Are you suggesting that in a defined contribution plan you can structure the plan to permit rollovers to an IRA or other eligible retirement account while the Participant is still in the employ of the Plan Sponsor?  I assume you are not talking about loans or hardship distributions. 

David

[Bill Presson]

On 1/19/2024 at 5:15 PM, fmsinc said:

Are you suggesting that in a defined contribution plan you can structure the plan to permit rollovers to an IRA or other eligible retirement account while the Participant is still in the employ of the Plan Sponsor?  I assume you are not talking about loans or hardship distributions. 

David

Well you can have in-service distributions with some restrictions (age, service, etc) as well as different requirements based on the source of money (deferrals, match, ps, etc). But the OP question was related to money the participant rolled into the plan from an IRA or another plan. We generally design the plans to allow those funds to be distributed whenever the participant desires.

[Basically]

On 1/20/2024 at 2:36 PM, Bill Presson said:

We generally design the plans to allow those funds to be distributed whenever the participant desires.

Yes, totally agree.