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Timing of distribution notice


Guest ChuckLakeshore

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Guest ChuckLakeshore

When is the latest you must send notice to a participant that will be receiving a distribution? I've read the regs and I'm still unsure.

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A bit more background please.

Are you asking about a distribution on plan termination, on retirement, on termination(vested), lump sum payment, spousal consent, direct rollover, etc.?

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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Guest ChuckLakeshore

Notification of distribution on termination if vested.. no matter how they leave the company...

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When a participant terminates employment and has a vested (deferred) benefit, the sponsor must notify participant by the time of filing the 5500 for the plan year following the plan year of termination.

Example, assume a calendar plan year, so that the 5500 is due (with extensions) at 10/15 following close of plan year. If EE terminates on 2/25/98, then the notification to EE must be made by 10/15/2000. If EE terminates on 12/15/98, then the 10/15/2000 due date also applies.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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