Age Restriction on 457 Plan Distributions

[Guest A Montez]

Is it possible for a 457 plan to limit distributions, both in-service and after separation, to a participant's attainment of normal retirement age? As I read the regulations under section 457, the one-time, irrevocable election to choose a different distribution date and emergency withdrawals are permitted (i.e., they won't result in amounts being made available to a participant), but are not mandatory. However, I haven't seen any plans that do not permit the one-time election, or that don't allow emergency withdrawals.

[Carol V. Calhoun]

I would agree with your reading of the federal statute. From my experience, the reason that 457 plans so often permit emergency withdrawals and employee elections of distribution forms has to do with an employee relations perspective that this is "the employee's money," rather than with any particular legal requirement. Of course, you would need to consult applicable state and local law, as well as federal.