70 1/2 required distributions--changing mind after making initial elec

[Guest Diane DuFresne]

If a non 5% owner participant in a 401(k) plan previously elected to defer his 70 1/2 required distribution to the date of his retirement, can he now "change his mind" and elect to receive the 70 1/2 required distribution even though he is still working?

In practice, does anyone send elections to take a distribution or defer annually to all those participants who are over age 70 1/2? Or do you have participants complete a one-time irrevocable election to either commence distributions or to defer distributiosn until termination of employment?

Any help would be appreciated. Thanks.

[Kristina]

The elections I used were irrevocable elections which ended upon the termination of the employee. There was one employee who chose not to defer receipt as he and his wife used the money for Christmas shopping each year.

Are you considering allowing him to make a different election now? How can you change an irrevocable election??

With the tax ramifications so great on the required minimum distributions, I would be very concerned about missing an election if annual elections were used. 50% of any amount is a big nut for just about any tpa firm.

[Kirk Maldonado]

What does the plan say?