QPlan 55 separation exception

L1: QPlan 55 separation exceptionGFW,
recently got info about qplan that allows 55yr old separated employees to take partial or lumpsum distributions without 72t or 10% penalty. i noted that as one of the exceptions in your early info but dont see where the allowed nonpenalty distribution has to occur in same year as separation from service. is that part of the requirement or can a 55 yr old retire, leave money at company plan, then at age 57 decide he wants a piece(***uming company allows partials)of his qplan, take it without penalty. another source has told me the distr and sep have to be in same year that empl turns 55 or older. sorry for the rambling style but you guys speak a different dialect than most of us2003-10-07 10:38, By: ralphccbi, IP: [127.0.0.1]

L2: QPlan 55 separation exceptionHello Ralph:
The exception to which you are referring is IRC 72(t)92)(A)(v) Separation of Service At Age 55. There are two requirements to meet this exception:
(1) The ***ets must stay in the qualified plan; they may not be rolled over to an IRA.
(2) The plan participant must have terminated employment either after attaining the age of 55 or attains age 55 in the same calendar year as the separation of service occurs.
After these two requirements all withdrawal rules & mechanics are between the participant and the plan administrator; NO 72(t) penalties will apply. Therefore, separating from service at age 55 and waiting until age 57 to make an actual withdrawal is just fine.
TheBadger
wjstecker@wispertel.net

2003-10-07 10:55, By: TheBadger, IP: [127.0.0.1]

L2: QPlan 55 separation exceptionI have a client who was recently laid off. He is 56 years old. He has participated in his company’s 401K and now plans to do a direct rollover of his lump sum pension into his 401K.Does the resulting total account qualify for the separation exception or only the amount he originally had in his 401K? Thanks in advance for any light you can shed on this issue.2003-10-10 07:56, By: Garry, IP: [127.0.0.1]

L2: QPlan 55 separation exceptionI have a client who was recently laid off. He is 56 years old. He has participated in his company”s 401K and now plans to do a direct rollover of his lump sum pension into his 401K.Does the resulting total account qualify for the separation exception or only the amount he originally had in his 401K? Thanks in advance for any light you can shed on this issue.
The “Separation Of Service At Age 55” exception (IRC 72(t)(2)(A)(v)) applies to all qualified plans (IRAs excluded); therefore, this exception would apply to the entire balance.
TheBadger
wjstecker@wispertel.net
2003-10-10 08:05, By: TheBadger, IP: [127.0.0.1]