Distributions and Eligibility

[Guest russo40]

Our plan document states that upon termination of employment, a distribution must be made (after employee requests such) as soon as funds can reasonably be segrated and paid. Since our plan allows for self-direction, and the funds are already segregated--a distribution can occur within 7-10 days after termination of employment. I have searched our plan document and perhaps I'm looking for something too specific but, my question is this--If a plan participant has worked 500 hours, the amount of hours needed to qualify for profit share, terminates and takes a total distribution from the plan, does this participant still qualify for profit share allocation at the end of the plan year or is all partipation in the plan "totally" severed upon distribution. If the answer is yes, any suggestions as to how an administrator keeps in touch with the former participant if he/she moves alot. I would appreciate any and all suggestions. thanks

[rcline46]

Yes, they get an allocation and you have to find them to pay them. That is the joy of standardized prototypes, they are a problem to administer.

Make all payments after a 1 year break in service then you won't have the problem.

[david rigby]

If you are planning to change your plan as suggested by the prior message, don't forget 411(d)(6)!

[Guest russo40]

Thanks for your reply--I appreciate it!!