Expert: Allen - 3/23/2009

Question
Where do I find guidance on in-service distributions for people under age 59.5. I'm trying to understand if there is a way to do this for a 40 year old and there isn't any extra-ordinary circumstances.  He just wants to roll it over to an IRA and invest it into something other than what's available in the PS/401(k) plan.  He's the business owner, so we can modify the Plan Document to accomplish this easily.  Thanks.

Answer
I can help with some of this.

To start with, if he's unhappy with the investment choices, why not amend the plan to allow what he wants. If his document is one provided by a financial institution, this may not be doable. However, he can always use an individual document. It'll cost more. However, it may be worth the extra expense.

If that's not workable, the plan can be amended to allow for in service distributions. However, this will have to be one of the options offered in his document.

Even if the document is amended, in service distributions are only allowed from profit sharing contributions. 401k contributions and safe harbor contributions can not be taken in service before age 59 1/2.