Limitations on In-service withdrawals

I know that in-service withdrawals are a protected benefit, but what about limitations on such withdrawals?  For example, if the participant is only allowed 2 withdrawals per Plan Year.  Would this also be considered a protected benefit? Or would this be an administrative election?

I believe the 2 withdrawals would be a protected right.

Thank you.  

Take a look at Treas. reg. 1.411(d)-4, Q&A-1(b)(2)(ix). Clearly, you can certain go from 12 per year, or 10, or whatever, down to two. Two is probably as low as you can go.

7 hours ago, Luke Bailey said:

Take a look at Treas. reg. 1.411(d)-4, Q&A-1(b)(2)(ix). Clearly, you can certain go from 12 per year, or 10, or whatever, down to two. Two is probably as low as you can go.

Luke: are you sure you have typed the reference correctly?

3 hours ago, Larry Starr said:

Luke: are you sure you have typed the reference correctly?

Search for "(ix)De minimis change in the timing of an optional form of benefit."

The cite might be Q&A-2.  That is 1.411(d)-4, Q&A-2(b)(2)(ix) rather than 1.411(d)-4, Q&A-1(b)(2)(ix).

15 hours ago, Luke Bailey said:

Take a look at Treas. reg. 1.411(d)-4, Q&A-1(b)(2)(ix). Clearly, you can certain go from 12 per year, or 10, or whatever, down to two. Two is probably as low as you can go.

I would have to check it, I guess it will be beneficial for me too.

Larry, Mike is correct. It is Q&A-2. The rest of the cite is correct. Sorry.

45 minutes ago, Luke Bailey said:

Larry, Mike is correct. It is Q&A-2. The rest of the cite is correct. Sorry.

OK; now that we have the correct citation, I don't think that citation deals with the question asked.

Let's use this fact pattern: plan allows in-service withdrawals for anyone who is post NRA without the requirement of termination/retirement.  The plan is silent on how many withdrawals allowed per year.  At this point, can the plan administratively say "just one per year"?

To codify that, if the plan is amended to specify only one per year, do we have a problem?

Here is the cited item:

(ix)De minimis change in the timing of an optional form of benefit. A plan may be amended to modify an optional form of benefit by changing the timing of theavailability of such optional form if, after the change, the optional form is available at a time that is within two months of the time such optional form was available before the amendment. To the extent the optional form of benefit is available prior to termination of employment, six months may be substituted for two months in the prior sentence. Thus, for example, a plan that makes in-service distributions available to employees once every month may be amended to make such in-service distributions available only once every six months. This exception to section 411(d)(6) relates only to the timing of the availability of the optional form of benefit. Other aspects of an optional form of benefit may not be modified and the value of such optional form may not be reduced merely because of an amendment permitted by this exception.

This example is looking to change a current provision that limits it to once per month and will allow it once every six months.  Say we want to make it clear that only one per year is allowed.  Folks have said we would have to allow TWO per year, but if they took the two in January and February, then they would not have another opportunity until the following January and that is clearly more than 6 months as suggested in the example.

I'm not sure what the answer is, but I don't think 2 withdrawals per year is the same as one every six months. 

Comments?

It is too early for me to crawl this deep into the weeds.  At first  blush it seems directly on point with respect to the OP.  Key on the word "available".

Larry, I thought about the sort of argument I think you are making, but decided too complicated to try to elaborate on. If the plan before amendment said you can receive one distribution on 6/30 and one on 12/31, then an amendment to say only one on July 1 would be within 6 months of the two you are eliminating. But if, as seems more likely, the plan said 2 any time during the year, then you have no fixed point to measure the 6 months from. I think the rule just doesn't really contemplate the issue.