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Practice Management

Denial of a Distribution Postponement

Q. A plan has set the default in the absence of a distribution election to commence payments 90 days after separation from service. It also provides for a one-time election to postpone the payment but not accelerate it. The language specifically states it is permitted with the “approval of the plan administrator.” Why might the administrator would not approve it?

A. Denial usually is made if the employer already has a distributable event and then they try to postpone the distribution…its all about timing!