401k Inservice Rollover prior to age 55
An individual and an associate of a firm have each performed inservice rollovers of their 401k’s while still employed and under the age of 55.
These are NOT loans and are far in excess of $50k. I did not think this was possible. It is not due to any hardship or other qualifying event. They just wanted to do an inservice roll. One is 53 and one is 51.
I’d like to know if there is some workaround that allows this.
Permalink Submitted by Alan - IRA critic on Wed, 2013-01-16 23:49
A plan may allow in service distributions of after tax contributions and their earnings, and in some cases rollovers made to the 401k plan from another 401k plan. But employee elective deferrals cannot be distributed until 59.5. If they rolled over the entire plan balance, the plan is not in compliance and must undertake certain corrective actions as determined under EPCRS.