BG5150 Posted June 27, 2019 Posted June 27, 2019 We have a plan transitioning to us, can we eliminate partial withdrawals for terminated participants? We prefer full distributions only for them. Is it a cutback? Ok, say we can. Plan signed sealed and delivered. Restated for no partials. Now, there is pushback. The plan wants it back in. Can we do the partial withdrawal now, then amend it retroactively to allow it? Similar to when a hardship is granted when the plan initially allowed it. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
Kevin C Posted June 27, 2019 Posted June 27, 2019 Yes, a DC plan can be amended to eliminate partial withdrawals as long as an otherwise identical lump sum is available. 1.411(d)-4 Q&A 2 (e). You should be able to self correct under Rev. Proc. 2019-19 4.05(2), but it would be easier to do it right and do the amendment before paying the distribution.
BG5150 Posted June 27, 2019 Author Posted June 27, 2019 Thanks, Kev. That's what I figured. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
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