Definition
An action by a participant and beneficiaries to have certain treatments apply to their retirement assets. Examples of elections that can be made by participants and beneficiaries include the following:
- An election to have the five-year rule, instead of the life-expectancy option , apply to inherited retirement assets
- An election to defer part of compensation to a 401(k) plan as salary deferral contributions
- An election to have federal tax withheld from distributions, where the withholding is option
- An election to take a deduction for contributions to a Traditional IRA
Referring Cite
Varies with type of election
Additional Helpful Information
Some elections are irrevocable. For instance a plan may adopt a provision that permits beneficiaries to elect whether the 5-year rule or the life expectancy rule applies to distributions after the death of a participant .Such an election must be made no later than the earlier of the end of the calendar year in which distribution would be required to commence in order to satisfy the requirements for the life expectancy rule or the end of the calendar year which contains the fifth anniversary of the date of death of the employee. As of the last date the election may be made, the election must be irrevocable
