Abandoned Plan Distribution Rules

[Guest mmacer]

If a employer appears to have gone bankrupt due to

insufficient funds, there has been no formal termination of the plan, there is nobody to contact as their phone number is disconnected AND

participants are wanting their money, what should you do? It is our understanding that distributions do not automatically occur. Thanks for any input on the issue.

[Guest pineapple]

Assuming you are a participant in the plan, you need to immediately contact the trustee of the plan. In simple terms, the trustee is the person/company that is responsible for holding and safe-guarding the plan's money (i.e., making sure the employer doesn't use the money themselves). If there is a corporate trustee (a bank for example), then you should eventually receive your distribution. However, in the worst case scenario, the trustee could be an officer of the employer, in which case your money might disappear.

If you can't contact the trustee, I would immediately call the Department of Labor. Before you contact the DOL, you should find out as much information about the plan as you can (official name of the plan, employer's identification number, plan number, trustee, etc.). Try to find a copy of the summary plan description. If you can't find an SPD, go to www.freeerisa.com and pull up the Form 5500 that was filed for your plan.

Good luck.

[Erik Read]

I'll go one further and say we need a little more information - are you the TPA working on the plan or a participant/ex-employee looking for your funds?

If TPA, then you need to go the route of finding the trustee's or getting a new trustee appointed to make decissions and sign documents on behalf of the plan. Search the message boards for "orphaned plan" and see other discussions on similar topics.

Good Luck.

[Guest b2kates]

It may take formal action by the bankruptcy court to appoint a successor trustee.