An in-service distribution is the payment of retirement benefits while the participant is still employed. If your plan allows for in-service distributions it will be noted in Section 14 of the Adoption Agreement. Except for a few exceptions, participants must be at least age 62 to be eligible to receive an in-service distribution.

In most plans, if a retiree returns to service, whether as an elected official or as a regular employee, the default rule is that his or her retirement benefits must be suspended until he or she re-retires. However, some plans allow retirees to continue receiving retirement benefits after returning to service, under certain conditions. This scenario is addressed in Section 16(A) of the Adoption Agreement.

In the case of in-service distribution or returning to work after retirement, when a participant re-retires, his or her benefit will be recalculated to include any additional service credit, but an offset will be applied to account for all benefits paid before re-retirement. Even if a participant accrues multiple years of additional credited service, due to the offset the recalculated benefit may not be higher. The recalculated benefit cannot be lower than the previous benefit.