An event that makes a participant eligible to make withdrawals from a qualified plan, 403(b) arrangement or 457(b) plan. Examples of triggering events include:
- Reaching retirement age, as defined by the plan
- Terminating from service with the employer that sponsors the plan ( no longer working for that employer) or severance from employment
- Termination of the plan
- Death of the participant, in which case the beneficiaries would make withdrawals
- Disability of the participant. Disability would generally be defined under the plan document
Triggering events are defined in the plan document that governs the plan. Therefore, a participant must refer to the plan, or the summary plan description , for the plan to determine when they are eligible to make withdrawals.
Eligibility to make withdrawals can require a combination of more than one event, for instance reaching retirement age and separating from service.
IRC §401(a)(14); Treas. Reg. 1.401-1(b), Treas Reg §1.401(a)-14; ERISA §206
Additional Helpful Information
- Some plans may require participants to file claims in order to receive distributions from the plan. Treas Reg §1.401(a)-14(a)
- Some plans may allow participants to make withdrawals before they experience a triggering event . This is referred to as an in-service withdrawal, and is permitted under a profit sharing plan, 401(k) plan and 403(b) arrangement if allowed under the governing plan document.