Step 1 – Determine if Participant Is Eligible for In-Service Withdrawal and Send Form to Participant

Generally, a participant is eligible for an in-service withdrawal from the plan if he or she has:

  • Met criteria for an age-based withdrawal and is still employed. At any time after reaching age 591⁄2, participants may request a withdrawal from a profit sharing plan. With respect to a profit sharing plan (other than a SIMPLE 401(k) plan), withdrawals from accounts other than salary deferral 401(k) or Roth 401(k) may be available at an earlier age if permitted in the adoption agreement. 

    For a money purchase pension plan, an in-service withdrawal is permitted at normal retirement age (NRA). NRA is age 65 (or an age between age 62 and age 65 if specified in the adoption agreement). 

    Participants must specify the investment options and the amount or percentage to be taken from each option, unless the withdrawal is for the whole account. If no instructions are given, the withdrawal will be made pro-rata from all of the available options. Also, the amount is subject to any applicable withdrawal restrictions and taxes.
  • Met criteria for a service-based withdrawal and is still employed. If elected by the employer in the adoption agreement, a participant in a profit sharing plan (other than a SIMPLE 401(k) plan) may elect a withdrawal of the vested portion of employer contributions and employer matching contributions upon completing five years of participation in the plan.

    Participants must specify the investment options and the amount or percentage to be taken from each option. If no instructions are given, the withdrawal will be made pro-rata from all of the available investment options. Also, the amount is subject to any applicable taxes, IRS early withdrawal penalties and withdrawal restrictions (for example, no withdrawals are allowed directly from the SDBA without first liquidating assets and transferring them to the Program’s investment options).
  • Met criteria for a contribution accumulation withdrawal and is still employed. If elected by the employer in the adoption agreement, a participant in a profit sharing plan (other than a SIMPLE 401(k) plan) may elect a withdrawal of the principal vested portion of employer contributions and employer matching contributions that have accumulated in the plan for at least two years.



    Participants must specify the investment options and the amount or percentage to be taken from each option. If no instructions are given, the withdrawal will be made pro-rata from all of the available investment options. Also, the amount is subject to any applicable taxes, IRS early withdrawal penalties and withdrawal restrictions (for example, no withdrawals are allowed directly from the SDBA without first liquidating assets and transferring them to the Program’s investment options).
  • After-Tax Employee Contribution Account Withdrawal. If participants are contributing on a after-tax basis to a profit sharing plan, they may request after-tax withdrawals at any time. Withdrawals include the participant’s after-tax contributions and earnings, which are always 100% vested. 

    Participants must specify the investment options and the amount or percentage to be taken from each option, unless the withdrawal is for the entire after-tax account. If no instructions are given, the withdrawal will be made pro-rata from all of the available investment options. Also, the amount is subject to any applicable taxes, IRS early withdrawal penalties and withdrawal restrictions (for example, no withdrawals are allowed directly from the SDBA without first liquidating assets and transferring them to the Program’s investment options). Withdrawals will be made pro-rata from non-taxable contributions and taxable earnings.
  • Rollover Account Withdrawal. At any time, participants who have a rollover contribution source within their account (known as a “rollover account”) may request a rollover account withdrawal. Withdrawals include the participant’s rollover contributions and earnings, which are always 100% vested. Participants must specify the investment options and the amount or percentage to be taken from each option, unless the withdrawal is for the entire rollover account. If no instructions are given, the withdrawal will be made pro-rata from all of the available investment options. Also, the amount is subject to any applicable taxes, IRS early withdrawal penalties and withdrawal restrictions (for example, no withdrawals are allowed from the SDBA without first liquidating SDBA holdings and transferring the cash to the Program’s investment options).
  • Qualified Reservist Distribution. Participants who were ordered or called to active military duty after September 11, 2001 for at least 180 days (or for an indefinite period) may elect to receive a qualified distribution of their pre-tax 401(k) contributions and Roth 401(k) contributions while in active duty. Effective January 1, 2009, participants who are performing service in the uniformed services while on active duty for more than 30 days may request a withdrawal of all or any of their pre-tax 401(k) contributions and Roth 401(k) contributions while in active duty. Qualified reservist distributions are exempt from the 10% tax penalty on early distributions, but are subject to other applicable taxes.

If the participant is eligible for an in-service withdrawal, give him or her the In-Service Withdrawal Form along with a “Special Tax Notice Regarding Plan Payments,” “Notice of Benefit Payments,” and “Notice of Waiver of Annuity and Election of Alternate Benefit Payment Form.” If a participant in a money purchase pension plan wants an annuity payment, also give him or her the Annuity Quote/Purchase Form. If the participant wants to direct deposit the payment, also give him or her the Electronic Direct Deposit of Distributions Form.

Step 2 – Participant Decisions

Participants can request an in-service withdrawal by completing the In-Service Withdrawal Form.

Step 3 – Complete Forms

To request an in-service withdrawal, participants must complete an In-Service Withdrawal Form. If the participant wants a quote for an annuity payment, he or she must first complete an Annuity Quote/Purchase Form. Then, upon purchase, the participant submits both the Annuity Quote/Purchase Form and In-Service Withdrawal Form. If the participant wants his or her withdrawal or installment payments to be directly deposited into his or her account at a bank or financial institution, the participant must complete an Electronic Direct Deposit of Distributions Form. If the participant wants a rollover distribution wired to his or her financial institution, the participant must complete a Wire Instructions for a Partial or Lump Sum Rollover Distribution Form.

If annuities are offered by your plan,* married participants who choose a form of benefit other than a “qualified joint and survivor annuity” must have their spouse’s signed consent. An Authorized Plan Representative or notary public must witness the spouse’s signature. The date of the witness’s signature must be the same date as the spouse’s signature. Both dates must be within 180 days of the withdrawal in order to be valid. Note: If the witness is a notary public, documentation must be provided (i.e., a raised seal or ink stamp). If the Plan Administrator is married to the participant, he or she cannot serve as the witness of the spouse’s signature.

*Available in money purchase pension plans and target benefit plans only, and profit sharing/401(k) plans with assets merged from a prior money purchase pension plan.

Self-Directed Brokerage Accounts (SDBA)

Information about distributions for a participant with an SDBA can be found under “If Participant Has an SDBA.”

inservice withdrawal

Instructions for Completing In-Service Withdrawal Form(page 1)

A. You complete the employer information that relates to the plan. 
B. The participant completes the participant information.
C.You check the reason for the request and complete the relevant information. Review Step 1 under “Determining Eligibility” for more information.

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Instructions for Completing In-Service Withdrawal Form(page 2)

A.You complete the participant’s vested percentage. Bear in mind that your plan may have more than one vesting schedule for employer contributions — check your adoption agreement.
B. The participant checks a form of benefit and completes the relevant information. Section 5 must be filled out even if the participant is requesting a rollover.

inservice withdrawals

Instructions for Completing In-Service Withdrawal Form(page 3)

A.The participant should complete the Self-Directed Brokerage Account information, if applicable.
B. The participant should read the required minimum distribution transfer restriction.
C.The participant completes the direct rollover instructions, if applicable.

Instructions for Completing In-Service Withdrawal Form(page 4)

A.The participant must sign and date the Form.
B.If the plan is subject to the QJSA regulations, the participant should review the information in the box at the top of the page and check the appropriate option. If the participant is married, spousal consent must be obtained and witnessed, and. Then, the participant sends the Form to the authorized plan representative for signature.

Step 4 – Send Forms to the Program

Once you receive the participant’s completed In-Service Withdrawal Form, you must review and sign it as the Authorized Plan Representative. Then submit the completed In-Service Withdrawal Form (and Electronic Direct Deposit of Distributions or Wire Instructions for Partial or Lump Sum Rollover Distribution Forms, if applicable) to the Program using one of the methods described under “Mail & Email” in the Forms, Tools and Resources section of the Guide.

Steps 5 Through 7 – the Program’s Role

The Program will process the In-Service Withdrawal Form in good order upon receipt. The Program will send a check (if applicable) to the participant.

Any distributions processed by the close of business on the last business day of the quarter will be reflected on the participant’s quarterly statement. Quarterly statements are mailed within 10 business days after the end of each quarter.

Unless there is a “direct rollover,” the Program will withhold 20% of the taxable portion of any distribution to a participant or beneficiary that is eligible for rollover. The plan must comply with any mandatory state income tax withholding rules (which vary by state). Participants will receive credit for payment of these taxes when they file their annual tax returns for the year in which the payment was made to the participant. Also, participants who want to elect additional withholding from the required minimum distribution payment may complete IRS Form W-4P at least 30 days before receiving the distribution. Form W-4P must accompany the distribution paperwork.

If benefits are distributed before age 591⁄2, the payment may be subject to a 10% early distribution tax.

In general, participants who receive a check payable to themselves can roll over the full distribution amount to an IRA or another employer’s qualified plan within 60 days of their receipt of the check. However, to roll over the entire amount of the payment, the participant should (but is not required to) find other money to replace the 20% that was withheld for federal income tax. The participant receives credit for the taxes paid when he or she files his or her income tax return for that year. If the participant only rolls over the 80% that was received, the participant will still be taxed on the 20% that was withheld and not rolled over.

Amounts rolled over will not be taxed until the participant receives a payment from the IRA or other employer plan.

The participant may be able to use the special tax treatment for lump-sum distributions. The participant should see his or her tax advisor for more information.

In January of the next calendar year, the Program will mail an IRS Form 1099-R to the participant regarding any taxable distributions for the prior tax year.