Leaderboard

The confusion has to do with 2 different provisions in the law. First, you have 401(a)(31)(B) which requires that "mandatory distributions" be rolled over to an IRA if the participant makes no election and the amount exceeds $1,000. IRS Notice 2005-5 provides that for this purpose, a "mandatory distribution" is one that is forced out under the cash-out rules and made prior to the later of age 62 or NRA (Q&A 2 is below). This is what's reflected in the 402(f) notice. You then have Regulation 1.411(a)-11 which provides that participant consent is required where a distribution is "immediately distributable," which is prior to later of NRA or age 62. Relevant portion of the regulation is below. The $5K cash-out provision is an exception to this rule. So, mesh those together and what you end up with is that after NRA/age 62, you can force out a distribution regardless of the amount. But there is no requirement to rollover the amount to an IRA if a participant makes no election. That means it's up to the plan terms (or arguably plan procedures) on what happens if no election is made - this is no different than with respect to amounts below $1K where the auto rollover isn't mandatory, but many plans do the rollover because it avoids uncashed checks. So, you first see if the plan forces cash-outs at NRA/age 62, and if so, and no participant election is made, does the plan or plan procedures provide for automatic rollover into an IRA or does the plan cut a check and hope it gets cashed. From Notice 2005-05. Q-2. What is a mandatory distribution? A-2. A mandatory distribution is a distribution that is made without the participant’s consent and that is made to a participant before the participant attains the later of age 62 or normal retirement age. A distribution to a surviving spouse or alternate payee is not a mandatory distribution for purposes of the automatic rollover requirements of § 401(a)(31)(B). Although § 411(a)(11) generally prohibits mandatory distributions of accrued benefits attributable to employer contributions with a present value exceeding $5,000, the automatic rollover provisions of § 401(a)(31)(B) apply without regard to the amount of the distribution as long as the amount exceeds $1,000. From 1.411(a)-11: (4) Immediately distributable. Participant consent is required for any distribution while it is immediately distributable, i.e., prior to the later of the time a participant has attained normal retirement age (as defined in section 411(a)(8)) or age 62. Once a distribution is no longer immediately distributable, a plan may distribute the benefit in the form of a QJSA in the case of a benefit subject to section 417 or in the normal form in other cases without consent.

I saw this recently... proposal for 5558 electronic filing <highlights are mine> [edit: I just saw Lou S. reply] 2022-21584.pdf

You have it right. The percentage is being indexed for COLA. No, it doesn't make any sense, but that is how Congress did it. It is also more maddening that the PBGC continues to tell Congress they don't need the money and they are currently showing large surpluses, but because the premiums are considered "general revenue", and can be counted against general spending, Congress won't reduce them.

A person called EFAST, and the answer was that it could take up to 20 days for attachments to show up online. They are reviewing each attachment for confidential information, SSN's, etc. If you get a "Filing_Received" status, you're good. ******************* EDIT: just checked a couple of filings. Filed 10/13, audit is online. Filed 10/17, audit not online yet.