May a qualified plan participant make annual elections to defer distributions after age 70-1/2?
November 24, 1999 Question: In 1997 an employee who participates in a 401(k) plan is required to receive a minimum distribution. In 1998, he is provided an election form to receive or defer the next payment of the required minimum distribution. Can he now, in 1999, elect to defer the next minimum distribution? He is still employed by the employer and is not a 5% owner. Answer: The answer depends on the terms of the plan. Nothing in IRC section 401(a)(9) (the minimum distribution rule) precludes the participant from annually electing to take or defer otherwise required distributions as long as he has not yet retired (and is not a 5% owner). However, the plan document may be written, for purposes of administrative convenience, to make the distribution/deferral election a permanent one. Note that if, due to a prior election, he is receiving a distribution he does not want, he can roll it over to an IRA if he has not yet retired. An alert reader has added the following question: A follow u
