Jump to content
waid10

457(B) - Distribution Commencement Date

Recommended Posts

Hi. We have an employee that participated in our 457(b) Plan. She terminated employment in June of 2009. Upon her termination, she completed the form to defer distribution commencement until a later date. She selected the maximum deferral, choosing to receive her account at age 70 1/2. She now comes to us and wishes to receive distribution of her account sooner (actually, I believe she wants to start distribution now). She is age 62. Am I correct in my reading of Treas. Reg. 1.457-7©(2)(iii) that the law permits a change to a distribution election ONLY if the change pushes the distribution date further into the future and that a change accelerating the distribution date is not permitted?

 

Thanks for any help.

Share this post


Link to post
Share on other sites

You are correct. Hopefully this was fully explained to the participant. The regulation does not allow acceleration once a written election has been made to delay the distribution to a specific date.

 

On the other hand, the 457(b) plan itself could be terminated, and perhaps that could precipitate an acceleration, but I suggest you seek legal counsel to verify that - check with those who drafted your 457(b) document.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

×
×
  • Create New...