Can amount of a specific installment distribution be changed at for a

[Guest michaelv]

If a a participant has elected installment distributions, and occasionally needs a bigger check in a given month (for vacation, holidays, etc), is it allowable to accomodate request? I think the answer is no.

Is a request for installment distribution and irrevocable decision?

Thanks for any help.

[Guest Benefits Maven]

Its going to depend on what your plan document allows. The most I have seen is a change to a single lump sum for the balance of the plan value. In other words, I collect the first six of ten installments, then say, ok give me the rest in a single lump sum. It should be specified in the document if this is allowable. I have never seen anything set up the way you are suggesting.

[Guest michaelv]

Given the above, would the following scenario, if allowed in the document, be satisfactory:

Upon terminating, the participant elects to have 80% of his vested account balance paid to him in installments. The other 20%, which would be indicated as a flat dollar amount, would not (yet) be distributed. The participant could take non periodic distributions from this remaining amount, while still receiving the monthly installment payment.

[QDROphile]

Depends on what the plan says and the plan can say almost anything. But flexibility is seldom allowed because it is too much of an administrative burden. The prior post descibes the most common variation on what is otherwise usually an inflexible arrangement. Don't cheat plan terms. Bad planning by the participant is not your problem.

[Guest Benefits Maven]

I agree absolutely with QDROphile. Don't complicate your life by setting up a plan that allows that kind of flexibility. I doubt your plan document currently allows it and for good reason. That sort of thing can get out of hand far too easily. If he needs that kind of flexibility, let him roll his money into an IRA where there is generally more flexibility than in a qualified plan. Keep the rules in the plan simple for the sake of administration.

[RCK]

I need to jump on the "don't do it" bandwagon. We inherited a plan through acquisition that has historically allowed retirees to treat their Profit Sharing account as a savings account. They stop by the office every few months, swing by to see their old buddies, and submit a distribution request for a few hundred dollars, or a thousand, or whatever they need. There is no way to either get rid of that or maintain it now.

This is an extreme case, but it would not be difficult to see michaelv headed that way.