Jump to content

Terminating Money Purcahse Plans--Lost Participants and Spousal Consent


BG5150
 Share

Recommended Posts

Money Purchase Plan terminated 3 years ago.  Only accounts left are for lost participants and each has over $5,000.  Record keeper will not cash the accounts out and move to an IRA because of the spousal consent issue.

What can the sponsor do to get this plan closed up?

Link to comment
Share on other sites

The PBGC provides (if the distributee’s benefit is more than the ERISA § 203(e) amount [$5,000]) a joint-and-survivor annuity, unless the distributee elects, with the spouse’s consent, a different form of distribution.

Pages 60812-60813, 60828-60829 https://www.govinfo.gov/content/pkg/FR-2017-12-22/pdf/2017-27515.pdf

For the forms and instructions, https://www.pbgc.gov/prac/missing-participants-program.

  • Like 1
Link to comment
Share on other sites

And EBSA's Field Assistance Bulletin No. 2021-01 (Jan. 12, 2021) interprets relevant law to allow a transferring plan’s administrator to “pay [the PBGC’s] fee from the transferred account, unless the plan terms prohibit such payment.”

https://www.dol.gov/sites/dolgov/files/EBSA/employers-and-advisers/guidance/field-assistance-bulletins/2021-01.pdf

 

Link to comment
Share on other sites

  • 3 weeks later...

So, bad news.

We cannot use the PBGC program for this because the date of the plan termination is October 2016.  The program is only available for plans terming on or after 1/1/2018. (I thought it was October 2017, but still out of luck...)

Any other thoughts on how to get around the spousal consent issue?

Because these people are missing, we can't even be sure if they are married or not.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...