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Posted

A participant is 63 years old and per the plan, he can take an ISW (59-1/2) of all of his money.  The NRA is 65.  He has Roth, rollover, 401k, safe harbor and PS money in the plan.  He is 100% vested.

He wants to take an ISW from the plan just from his Roth.  Is he required to take the ISW first from any of the pre-tax accounts?  The recordkeeper is saying that but I don't see where in the plan document that is required.  Is that an IRS requirement?

Thanks

Posted

FWIW - I had this same siutation a few years ago and upon research found that if the roth distribution was qualified (i.e. after age 59 1/2 and first roth contribution was 5 or more years prior) then the participant could, in fact, take just roth out.   Therefore I believe that the recordkeeper is incorrect....

Posted

There is no statutory or regulatory rule requiring proration or providing an ordering rule. It is based on your plan document. Some plans allow choice. It varies. But it is, again, based on plan document, or a written procedure under the plan document.

Luke Bailey

Senior Counsel

Clark Hill PLC

214-651-4572 (O) | LBailey@clarkhill.com

2600 Dallas Parkway Suite 600

Frisco, TX 75034

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