In-service Distribution In General

I understand that not all plans allow for in-service distributions.  And I understand that you must die, become disabled, be terminated or reach retirement age.  But all that aside, can a participant request and can a plan make an in-service distribution to an active participant that isn't considered a hardship in-service distribution?  Of course the payout would be taxed and coded early.   Is this possible?

The terms of the plan govern what is possible! Plus generally things that are operationally allowable under legislation/regulation where you are in a remedial amendment period, and the plan hasn't yet been amended. For example, beginning in 2024 you could have domestic abuse withdrawals, if the plan sponsor allows, even though the document hasn't been formally amended yet.

There are a lot of ways for a defined contribution plan to allow in-service withdrawals of vested amounts before retirement, death, disability or other termination of employment.  For example, a lot of 401(k) plans allow for in-service withdrawals (including elective deferrals) upon reaching age 59 1/2.  Most plans allow in-service withdrawal of rollovers at any time.

Vested non-elective employer contributions may be made available for withdrawal of amount that have been in the plan at least 2 years.  Plans may make all vested NECs available once a participant has at least 5 years of participation.

Most pre-approved plan documents provide a checklist of available in-service withdrawal options.  Check your document - you may be pleasantly surprised by the choices.

What Paul I says generally covers it.  Rather than say DC plans, I'd say profit-sharing (which is what 99%+ of 401(k) plans will be) and stock bonus plans, but not money purchase pension plans, a type of DC plan that's practically obsolete.  I vaguely recall that there are special withdrawal limits that apply to matched employee contributions (having to do with the definitely-determinable-benefit rule) but again this is probably an obsolete design.  As others have said, the withdrawal rules, like any benefit payment rules, must be expressly provided for in the plan document.  This gets into technical areas that call for definitive answers by experts in the qualification rules.

Roycal, good point about the money purchase plans.  The window for in-service distributions is very narrow for them.

https://www.irs.gov/retirement-plans/plan-participant-employee/when-can-a-retirement-plan-distribute-benefits