401K in-service distrbution to IRA
I have a law firm client that has a 401K that does not allow for In-service distributions. Can an existing plan be ammended to do so? There are 8 attorneys the youngest being 67.
I have a law firm client that has a 401K that does not allow for In-service distributions. Can an existing plan be ammended to do so? There are 8 attorneys the youngest being 67.
Permalink Submitted by mk foss on Mon, 2008-09-29 22:49
A 401(k) plan can be amended to allow in service distributions. Employee deferrals cannot be withdrawn before the employee has reached age 59-1/2. That’s not your problem but the amendment should probably include that language in case it would ever apply.
The amendments must not discriminate in favor of the highly compensated – even if the plan only covers highly compensated folks.
If they’re using a plan provided by the custodian or plan administrator, the entire plan may need to be amended or rewritten to accomodate the needs of this group.