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Showing content with the highest reputation on 12/09/2023 in all forums

  1. I agree with Peter on the involuntary distribution part, although Lou S. you may well be right that the involuntary rollover isn't practically available. I've never seen this actually happen because neither the plan nor the participant is typically this stubborn, but if the participant has separated and is past NRA, the plan could just send the participant a check and withhold 20%, if the participant refused to submit distribution paperwork, assuming that's what the plan document provided.
    1 point
  2. @Peter, I'm a aware of multiple providers who will take cashout IRAs under the dollar limit or will take cashout rollover IRAs of any dollar amount if the Plan is terminated, but I don't know of any who take cashout rollover IRAs over the cashout limit because the participant is at the later of age 62 or Plan's Normal Retirement Age and the Plan calls for them to be cashed out. These providers may exist and if they do, I'd be interested in them. As to the OP question whether it is correct or not, our Plans will pay the RMD, if the participant is terminated and if they want more then the IRA we tell them the plan requires they take a full distribution either taxable, rollover or split between the two but the Plan does not make ad hoc payments.
    1 point
  3. My experience of almost 40 years is that the check date is most often used. Otherwise, the administrative work is a mess.
    1 point
  4. This is a classic question where payroll periods and plan entry dates are not synchronized. In my experience, most plans have used the first payroll paid after the entry date, but I have worked with plans that start with the end of the payroll period that starts on or after the entry date. What is unsaid in these discussions often deals with other payroll practices like payrolls that pay in arrears, or one or two weeks in arrears, or pay in advance. The bottom line is for the plan administrator to decide how the rules will apply and then stick to that decision consistently.
    1 point
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