Uncashed checks post-plan termination

[Guest KennyH]

What are the ramifications of having distribution checks going uncashed beyond the PBGC's asset distribution deadline for a standard DB plan termination?

[mbozek]

What are the ramifications of having distribution checks going uncashed beyond the PBGC's asset distribution deadline for a standard DB plan termination?

Has there been a distribution of all plan assets under the IRC rules to terminate the plan under the IRC? IRS requires that all assets must be distributed from the plan within an administratively feasible period for which 1 year is a safe harbor. If checks remain uncashed after a year has plan terminated?

[david rigby]

Just a thought: the plan administrator might be curious to determine if those checks are uncashed due to death of the recipient.

[Guest KennyH]

Has there been a distribution of all plan assets under the IRC rules to terminate the plan under the IRC? IRS requires that all assets must be distributed from the plan within an administratively feasible period for which 1 year is a safe harbor. If checks remain uncashed after a year has plan terminated?

That would be my question. In a PBGC standard termination you have a certain dedline by which to distribute all assets. If you have done that and believe the plan terminated so you file a Form 501, but an uncashed check pops up 60, 90, 120 days later, what happens?

The plan not being considered terminated would be one possible ramification. If that is the result what does that mean? Does that mean we inappropriately distributed benefits to active participants? How do we correct for that? The plan hasn't been following 430 post-termination date so what do we need to do there?

[mbozek]

If the checks are not cashed can plan admin transfer the accrued benefits to PBGC under the provision for missing participants? Or escheat the funds to the state agency of the last known address of participant assuming the state agency will accept the funds? Could employer check SS death register to determine if participant is dead?

This is not the first time a plan has terminated with undistributable benefits. What if plan sends check to participant who is on a 1 year around the world cruise?