401K

L1: 401KOn a 401k established prior to Jan. 1, 2003 can the long term bond rate still be used or must we revert to the new ruling using the short term bond rate??? If so where can this be found in writing.
Thanks,2004-04-16 14:02, By: Steve-o, IP: [162.18.17.229]

L2: 401KA little clarrification needed – I admit, I have no idea wherebond rates (long or short term) impacta 401(k) plan except as a return on investment. Could you provide a little detail?2004-04-16 21:22, By: Gfw, IP: [172.16.1.72]

L2: 401KWhen planning on retiring prior to your 591/2 birthday you must go into a 72t IRA. The rate of return you can draw is tied to the short term bond rate with the new rules. The old rule tied it to the long term bond rate. I found where aSEPP planstarted prior to Jan. 2003 was grandfathered in so the long term bond rate could be used. I was looking for the same ruling in regards to a 401k started prior to Jan 2003 but could not find anything on this. My plan was to retire this fall but with the new ruling using the short term bond rate I can not. Hope this helps sorry for the delay was on vac. last week.2004-04-26 09:38, By: Steve-o, IP: [162.18.17.229]

L2: 401KLets start with…

Any SEPP plan initiated after 12/31/2002 is subject to the new rules. This applies to all qualified money including 401(k)s, IRAs, etc. The only plans that were grandfathered were SEPP plans that commenced distributions prior to 2003.
The interest rate is not tied to the short term bond rate. The maximum rate is 120% if the mid-term Applicable Federal [AFR]rate as published by the IRS for either of the two months immediately preceeding the month the first distribution is made. This rate is somewhat consistent with but not the same as the 5-year treasury.
The maximum interest rate for pre-2003 plans was generally considered to be 120% of the long-term AFR – again a rate published by the IRS.
Hope this helps 2004-04-26 09:57, By: Gfw, IP: [172.16.7.101]