45. Restrictions on immediate distributions

Statement of Requirement: Code §§I RC 411(a)(11 ), ) and 417(e)(2); Reg. §§ Treas. Regs. 1.401(a)20, 1.411(a)11, 1.417(a) (3)-1, and 1.417(e)-1; Notice 2007-7 , 2007-5 I.R.B. 395; Proposed Treas. Reg. § 1.411(a)-11

Document Provision: _____

Sample Plan Language:

If either the value of a participant’s vested accrued benefit derived from employer and employee contributions exceeds $ 5,0007 ,000 ($5,000 for distributions made before 1/1/2024) or there are remaining payments to be made with respect to a particular distribution option that previously commenced, and the accrued benefit is immediately distributable, the participant and the participant’s spouse (or where either the participant or the spouse has died, the survivor) must consent to any distribution of such accrued benefit. The consent of the participant and the

271 | Defined Benefit Plan LRM Package 08/2020 06/2026

participant’s spouse shall be obtained in writing within the 180-day period ending on the annuity starting date. The annuity starting date is the first day of the first period for which an amount is paid as an annuity or any other form. The plan administrator shall notify the participant and the participant’s spouse of the right to defer any distribution until the participant’s accrued benefit is no longer immediately distributable and the consequences of failing to defer any distributions. Such notification shall include a general description of the material features, and an explanation of the relative values of, the optional forms of benefit available under the plan in a manner that would satisfy the notice requirements of Code §I RC 417(a)(3).

The notification shall be provided no less than 30 days and no more than 180 days prior to the annuity starting date. However, distribution may commence less than 30 days after the notice described in the preceding sentence is given, provided the distribution is one to which Code §§I RC 401(a)(11) and IRC 417 do not apply, the plan administrator clearly informs the participant that the participant has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option), and the participant, after receiving the notice, affirmatively elects a distribution.

Notwithstanding the foregoing, only the participant need consent to the commencement of a distribution in the form of a qualified joint and survivor annuity while the accrued benefit is immediately distributable. Neither the consent of the participant nor the participant’s spouse shall be required to the extent that a distribution is required to satisfy Code § IRC 401(a)(9) or Code § IRC 415.

Present value shall be determined in accordance with section _____ of the plan. If elected by the employer in the adoption agreement, a participant’s vested accrued benefit shall not include the portion that is attributable to rollover contributions (and earnings allocable thereto) within the meaning of Code §§ IRC 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16).

(Note to reviewer: The blank should be filled in with the plan section number corresponding to LRM #42. The election refers to the election in the sample adoption agreement provisions of LRM #44.)

An accrued benefit is immediately distributable if any part of the accrued benefit could be distributed to the participant (or surviving spouse) before the participant attains (or would have attained if not deceased) the later of normal retirement age or age 62.