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Posted

The plan document has a cash out provision at age 62 for balances that are greater than $5,000. 

"Involuntary cash-out of a terminated Participant's Account balance when it exceeds the cash-out amount specified in F.11a ($5,000) is deferred under Section 7.03(b)until: Later of age 62 or NRA - payment made in lump sum only"

Some participants have money purchase and their balances are greater than the $5,000 cash out threshold. As the money purchase is subject to J&S and spousal consent is required, does this mean that I cannot cash out those participant who have a balance greater than $5,000?

Posted

I'd think there is language, catchall or otherwise, somewhere in the plan that says that particular section does not apply to money subject to J&S rules.  I agree you can't cash them out, at least for those types of money...whether they can't be cashed out at all or can be for non-MP money depends on plan language, or maybe interpretation of plan language.  In an ideal world whoever checked that box would have thought this through and clarified things (or not checked the box).

Ed Snyder

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