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Bill, do you send them to everyone who had a balance on 12/31 or currently?

For example, Kim is termed and had a balance on 12/31/20.  She took a full distribution on 1/31/21.  Do you instruct the plan administrator to send her an SAR?

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

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11 minutes ago, BG5150 said:

Bill, do you send them to everyone who had a balance on 12/31 or currently?

For example, Kim is termed and had a balance on 12/31/20.  She took a full distribution on 1/31/21.  Do you instruct the plan administrator to send her an SAR?

We are a little flexible in that regard. I personally think anyone that had a balance at any time in the year should get one, but I get push back from others that I'm being ridiculous.

William C. Presson, ERPA, QPA, QKA
bill.presson@gmail.com
C 205.994.4070
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I'm with Bill, since I'm a coward at heart with regard to disclosures. Although there is no civil penalty for failure to provide, there are (last time I looked) possible criminal penalties for WILLFUL failure to provide. Although most would disagree, I think I'm too pretty to spend time in prison...

All kidding aside, I think any potential for trouble isn't work the risk, for what would generally be a limited number of former participants in this situation. And putting myself in the Participant's shoes, it isn't IMPOSSIBLE (although quite unlikely, since participants neither read nor understand this stuff) that there might be something there that might bring into question something about the distribution.

All that said, I'd have to say that the "risk" of not providing it is pretty small.

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Just to play devil's advocate: We send to anyone that had a balance during that year - even if paid out the current year and before we send out the SAR. And there is a downside - we get a bunch of calls from the paid-out participants asking why they got it and to help them check if they have more money. Dealing with those calls and emails takes time. 

ERPA, QPA, QKA

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