Guest RONNIE WASEL Posted June 13, 2003 Posted June 13, 2003 401 k plan has a few accounts of prior participants under $1,000 that they would like to force out. It is my understanding that if they do not hear back from the participants then the trustees can have the financial instutition roll these monies out of the plan into an IRA fbo the former participants. The trustees have notified the financial institution of the above circumstances, yet the financial institution has denied doing this without the former participants signatures. The trustees have decided to write the financial institution an letter requesting that this be done. Needs - Does anyone know the regs or any correspondonce directly relating to this so that it can be referenced in the letter? Thanks, Ronnie
Harwood Posted June 13, 2003 Posted June 13, 2003 Good luck. Banks don't want to open IRAs without Participant signatures. EGTRRA 2001 has a provision that mandatory cash-out of balances between $1,000 and $5,000 - where the Participant fails to make an election - will go to an IRA that will be set up in the Participant's name. This provision is not effective until the Department of Labor issues regulations. The Department has a three year deadline - May 2004. It is going to be hard for the DOL to come up with incentives for Trustees to open IRAs without signatures.
R. Butler Posted June 13, 2003 Posted June 13, 2003 As Harwood points out that IRA rule isn't effective until the regs are issued. Just force them out.
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now