Inservice Distribution Rolled Over To IRA

The owner in a 1-life profit sharing plan took an inservice distribution and rolled it over directly into his IRA; no taxes were withheld.  He is under age 59.5 and hasn't yet attained NRA, and the Ft William document that the plan has allows for such distributions.  The Form 1099-R, however, shows that code 1 (early distribution) should not be used with code G (direct rollover), or vice versa.  I recall that such distributions aren't allowed before age 59.5 from pension plans, but this is a psp.  Was this an impermissible rollover?

Since it was a rollover, you don't use code 1. It's strictly a G.

The restriction of in-service distributions prior to age 59.5 applies only to certain sources of funds such as elective 401(k) contributions. If the plan has some other in-service condition and the funds were from an eligible source, such as employer profit sharing I see no reason why the rollover would not be allowed. And Bill is correct a rollover should have Code G, not Code 1 for a rollover.

Thank you both for your quick responses.