S.D. Admin. R. 62:03:05:07

Current through Register Vol. 51, page 30, September 3, 2024

Section 62:03:05:07 - In-service distributions of small amounts - Calculation - Handling of certain involuntary distributions

Any other provision of this chapter notwithstanding, a participant may receive an in-service distribution from the plan, or the plan administrator may render an involuntary distribution to the participant, under the following conditions:

(1) The participant is inactive in the plan and has made no deferrals for at least two years prior to the distribution;

(2) The total distribution whether elective or involuntary or both does not exceed $5,000; and

(3) The participant previously has not received either an elective or an involuntary distribution under the plan.

If implementing subdivision (2) of this section, the value of a participant's nonforfeitable account balance shall be determined without regard to that portion of the account balance that is attributable to rollover contributions (and earning allocable thereto) within the meaning of §§ 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e) of the code.

If an involuntary distribution is in excess of $1,000 and if the participant does not elect to have the distribution transferred to an eligible retirement plan pursuant to § 401(a)(31) of the code or does not elect to receive the distribution directly, the distribution shall be transferred to an individual retirement plan of a designated trustee or issuer. The plan administrator shall notify the participant in writing that the distribution may be transferred to another individual retirement plan.

S.D. Admin. R. 62:03:05:07

24 SDR 160, effective 5/24/1998; 28 SDR 111, effective 2/14/2002.

General Authority: SDCL 3-13-54.

Law Implemented: SDCL 3-13-54.