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Early distribution |
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Early distribution |
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| Such individuals can take "qualified Hurricane Katrina distributions" from retirement plans of up to $100,000 without penalty and without the 10% early distribution penalty or 20% mandatory withholding tax; the roll-over period to repay distributions is extended to three years and the income tax is spread evenly over three years for the penalty-free withdrawals. A haircut provision is defined as a percentage loss the plan participant would suffer due to an early distribution from the plan. Therefore, VEBA termination can be made prior to age 59-1/2 without subjecting the distributee to the 10 percent early distribution penalty. |
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Early distribution