Distributions of amounts less than $200 are not required to be eligible for direct rollover and are not subject to mandatory withholding. The language in the 402(f) notice does not apply to these situations. Therefore, shouldn't plan administrators be able to immediately make distributions to terminated participants with less than $200 vested account balances without providing the 402(f) notice and without waiting 30 days? It would seem a cover letter with the check explaining the 60 day rollover rule would suffice.

This is a really old post that no one replied to. I have read other posts that have indicated that you are still required to provide a notice before involuntarily cashing out a balance of less than $200.00. Other reading has suggested that we would not need to provide a notice. Can anyone clarify for me if a notice is required in this case and is it the 402(f) notice or some other notice?

Kind of an interesting question. See 1.401(a)(31)-1, Q&A-11.

It seems to me that if, as in the case Wolfman originally discussed, the plan does not permit rollovers of <200, (which is permissible) then no 402(f) notice need be distributed to those participants.

However, if the plan DOES permit rollovers of these small amounts, since they are in fact eligible rollover distributions under 402(c), (because 402(c) does not exempt these amounts from the definition) then the notice must still be provided.

Bringing this back up, because I think my original response was a severe braincramp. I think the 402(f) notice requirement still exists, even though the plan doesn't have to offer a direct rollover option. I'd love to see some official guidance that says otherwise, but I'm not aware of any.