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February 15, 2009

Triggering event

Your Guide

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Definition

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:

  1. Reaching retirement age, as defined by the plan
  2. Terminating from service with the employer that sponsors the plan ( no longer working for that employer) or severance from employment
  3. Termination of the plan
  4. Death of the participant, in which case the beneficiaries would make withdrawals
  5. 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.

Referring Cite

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.

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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