Distributions

AFPlanServ® will provide forms for each type of distribution allowed under the Plan, and will approve transactions across all vendors.

What Employers Need to Know

Employers need to be aware of the limits on distributions. While most Plans allow participants to begin taking distributions when they reach normal retirement age, many Plans allow earlier distributions under certain circumstances. Employers should ensure only permissible distributions are available under their Plan and monitor distributions to make sure procedural requirements and limitations are met across vendors.

Learn more about:

• Transfers and exchanges
• Plan loans
• Hardships
• Unforeseeable emergencies

403(b) Plan Distributions

Generally, Code section 403(b) and Treasury Regulations require that amounts contributed to a 403(b) Plan may not be distributed to participants or their beneficiaries earlier than that participant’s attainment of age 59 ½ or older, death, disability, severance from employment, or the occurrence of a qualifying hardship. 403(b) Plans must also meet the required minimum distribution rules which require distributions after a participant attains age 72 (if not still employed). SECURE 2.0 has updated this age to 73 effective January 1, 2023. Anyone who turned 72 before December 31, 2022, is not affected by this change. 

457(b) Plan Distributions

Generally, Code section 457(b) and Treasury Regulations require that amounts contributed to a 457(b) Plan may not be distributed to participants or their beneficiaries earlier than that participant’s attainment of age 59 ½ or older, severance from employment, or the occurrence of an unforeseeable emergency. 457(b) Plans must also meet the required minimum distribution rules which require distributions after a participant attains age 72 (if not still employed). SECURE 2.0 has updated this age to 73 effective January 1, 2023. Anyone who turned 72 before December 31, 2022, is not affected by this change.