DC plan distributions

L1: DC plan distributionsIf a (for example) 50 year old participant in a qualified DC plan terminates and begins to take SEPP (including BT money)in an option that avoids the 10% penalty and is rehired at age 52 (good-faith termination), may he/she continue to receive the SEPP payments while also increasing his/her DC balance by further employee deposits (including BT money) and employer matching deposits in the Plan? Any particular nuances here?2002-09-11 15:12, By: gle3186, IP: [127.0.0.1]
L2: DC plan distributionsI’m assuming that the SEPP plan is coming from an IRA and not the DC plan since most DC plans don’t allow periodic distributions at age 52.The SEPP plan stands by itelf and must be continued to age 59.5 (use our calculator for the exact date) and it’s existance would have no bearing on future contributions to the DC plan.2002-09-11 16:27, By: Gfw, IP: [127.0.0.1]

L2: DC plan distributionsThe substantially equal periodic payments are coming from a qualified DC (Thrift) Plan, not an IRA. Does this make a difference in your response, Gfw? The plan sponsor’s DB (FAE) plan allows for early retirement at age 50 with 10 years of service. The industry of the plan sponsor is cyclical with periodic downsizings and the purpose of allowing SEPPs from the DC Plan (post-termination) was to give terminated employees some access to the Thrift funds without the 10% penalty.2002-09-12 07:46, By: gle3186, IP: [127.0.0.1]

L2: DC plan distributionsHello gle3185:There is nothing wrong or improper about taking early distributions from a DC plan. The DC plan is covered under IRC 72(t) just like an IRA. In fact, there maybe material advantages to be had by keeping your assets housed in the DC plan versus rolling over to an IRA.The key here, since you seem to have been rehired by the same plan sponsor is for your employer to create a new account for you keeping the DC/SEPP account seperate & distinct from a new DC account representing your contributions & employer matching attendant to your recent rehiring. Do this and everything will be fine. Do NOT allow new contributions to flow into or be comingled with the old DC account.TheBadgerwjstecker@wispertel.net2002-09-12 09:00, By: TheBadger, IP: [127.0.0.1]

L2: DC plan distributionsI didn’t mean that there was any problems, etc. doing it from DC plan, I guess I’ve just never seen a plan that actualy allowed for it. Most employers aren’t willing to do the extra administration or incurr the extra costs. You must work for a great company! 2002-09-12 12:41, By: Gfw, IP: [127.0.0.1]

L2: DC plan distributionsMore than likely, he works for a company whose lawyers were not careful when they drafted the plan; then, they got stuck with permitting periodic distributions & maybe loans as well.TheBadgerwjstecker@wispertel.net2002-09-12 21:56, By: TheBadger, IP: [127.0.0.1]