Leaderboard

There are absolutely some fiduciary issues with the owners taking their money and leaving the rank and file with the bill.

I agree that the paper trail is needed, but not just as a CYA for when the auditor shows up. I don't see how the plan can move the benefit without the beneficiary's authorization and elections. Spouse beneficiaries in particular have numerous options for what they can do with their beneficiary benefit, and the Plan needs written, not verbal, instructions. As noted above, treat it like any other distribution. And I'd issue the 1099-R for the rollover. (Distributions of beneficiary benefits are not exempt from 1099 reporting, are they?) I agree that writing a check from the plan to the plan is not necessary. Book entry suffices for that.

I will be sooooooo happy when the PBGC (assuming the program is something that can be administered REASONABLY) will finally accept funds for missing participants. If done right, this will make life a whole lot easier for employers and TPA's. Bring it on!