Request for Determination Letter for a Qualified Plan rollover into

[Guest ubpMR]

I'm a TPA and I get requests for determination letters from terminated participants of the plans that I administer that wish to rollover their money to a new employer's qualified plan. It is my understanding that this is no longer required by law but I can't find the exact law that changed this. We deal with a lot of prototype plans and the determination letter doesn't have the name of the client on it so I hate doing this because it never satisfies the new employer. I then have to give them a copy of the Adoption Agreement.

Any help on where I can find the law so I can show these people that I don't have to give them anything.

[BFree]

try 401(a)(31)

[Mike Preston]

Try 1.401(a)(31)-1; Q&A 14.

[QDROphile]

Since the receiving plans can require whatever they want to reach their comfort levels, convincing them they don't "need" what they request might be difficult. They may be more careful and diligent than others, and proud of it.

[Mike Preston]

But if it is an employee benefit, and the IRS has specifically stated that the plan is not held liable if they accept an amount that turns out to be from a plan that isn't qualified (See the first part of that Q&A 14), they have to be, er, well, uh.... don't make me say it..... to require an LOD. Especially given the fact that the IRS is trying to discourage LOD filings by encouraging mass submitter providers.

[BFree]

I agree with QDROphile, but most TPAs don't get paid to submit paperwork to non-clients for ex-employees. I think that trying to educate the non-client is a reasonable compromise that will, in the end, benefit all TPAs.

[mbozek]

I dont think there is any requirement that a distributing plan must provide proof of being qualified (which is a farce anyway since it is only issued as to the form of a plan as of given date in a past year). If the TPA finds it burdensome to deal with the onerous requests of counsel for the receiving plans who have nothing better to do with their time or are billing their clients for this type of nonsense, then the TPA can simply say no. The participants can always rollover the distribution to an IRA since few custodians require more than an affirmation from the participant that the plan is qualified and then roll the funds from the IRA to the new employer's plan.

[RCK]

As a plan sponsor, I will require some sort of verification that the disbursing plan is qualified. The fact that the IRS is not going to apply the death penalty to my plan for accepting as a rollover a distribution from a plan that is not qualified is reassuring. But that would still leave me with the hassle of cleaning up a "dirty" rollover.

We provide a copy of Determination Letter for outbound rollovers, and require either copy of letter or a statement from Plan Sponsor (that plan is qualified) on inbound rollovers.

And I can't find the cite, but I think that a copy of the Determination Letter is one of the things that the participant is entitled to have access to.

RCK

[mbozek]

DOL regs on SPDs state that participant is entitled to examine all documents governing the plan including cb agreements insurance contracts and 5500s. However, part. is only entitled to copies of documents governing the operation of the plan. Det. letter is issued to employer for tax deduction purposes and only approves form of plan not operation.

[RCK]

Thanks, mbozek. Our consistently conservative ERISA law firm gave us the opinion that the Determination Letter was required to be provided on request. I like your interpretation better.

But to the original question, we'd still provide upon request for a rollover situation.

RCK