Leaderboard

Austin, I'm sure we can all do better in reminding clients about retention. This topic came up for me recently when I had a new client who had to reach back to 2 providers ago to locate some records, so I've made the recommendation for the intake team to talk to clients about the subject, at least in a high-level way. At a minimum, a client needs to be aware if their records are incomplete and make a conscious decision about how they want to handle that rather than simply assume that missing records are no big deal. I agree that new clients (and their advisors, where present) are often eager to simply get things moving and dislike the dig-around-in-the-file-cabinet aspect of changing providers, so many are reluctant to drink the records-retention water we lead them to. If they balk or decide against a VCP to fix a defect, I can understand their point of view even if I don't endorse it. It eases my mind to call attention to it, though, and it gives me something defensible to point to when the inevitable "you never told me about that!" conversation comes up.

Forfeiture is an acceptable approach, but I would not forfeit until distributions are mandatory, which does not include a provision that is triggered by simply losing touch with the participant. It would work with mandatory distribution of small balances, keeping in mind the mandatory rollover rules.

"It's a Volume Submitter plan, so that provision has the IRS blessing, at least." Ha Ha - I would certainly not hold that assumption. I assume you saw the EBSA Assistance Bulletin 2014-1 that was released early this week, but that only applies in the case of plan terminations. I think your only real option is the forced rollover. I would never recommend a forfeiture unless the amounts were very, very, very small.