1. An "in-service distribution" is a distribution from a 401 (k) or profit-sharing plan
while the employee is still employed by the company that provides the plan.
This is a non-hardship distribution. If this distribution is rolled over to an IRA
there is no 10% distribution penalty or current income tax due.
Why might an employee choose an in-service distribution?
An in-service distribution may give the employee more:
control over the retirement money
allocation choices
choice as to death benefit guarantees
choice of income or contract value guarantees