50% Owner now working less than 40 hours a month

[SSRRS]

Hi All,

A DB Plan sponsored by a corporation has the following provisions:

 

1. No in service distributions allowed, even if attained NRA.  

2. However, if working less than 40 hours a month, then if attained NRA, allowed to start taking benefits.

What if the corp has two owners (50/50). One of the owners wants to cut back on his work schedule and salary etc and work less than 40 hours monthly. 

Can this owner, who has reached, NRA, start to take monthly benefits from the plan, since he works less than 40 hours monthly or does this 40 hour rulr not apply to owners?

 

Thank you

[CuseFan]

That 40 hours per month "rule" is with respect to suspension of benefits provisions, if the plan provides, where those working more than that can be "suspended" from getting their pension after NRA and where the plan need not provide actuarial increases. I'm not aware of any different treatment for owners or HCEs, and it would/should be in the plan if there was.

You need to carefully read the document. You say no in-service even after NRA, but .... is (2) specific to a retiree who returns to work or is a simple reduction of hours enough? Just a reduction in hours does not constitute a separation/termination from service and that may be needed to trigger commencement.