Outdated Distribution Forms

[Guest mvp]

Is there a rule that says you cannot use a distribution form older than 60-90 days? I have to pay residual balances (year end Emoployer contributions) to participants who received a distribution of their then vested funds back in March.

If there is a rule, please let me know the code section and where to view this online.

Thanks!

[WDIK]

This link may apply to your question.

[JanetM]

When I was a TPA we would just pay the residual (clean-up) distribution exactly as the original was done. If they rolled the first one - issue remaining funds to same IRA/Plan. If they took the cash just send them the check.

[FundeK]

If the distribution is less than $200, I would pay it out without withholding and the participant can choose to rollover the funds if he so chooses. The problem I see with processing a residual to a rollover company is that you do not have a guarantee that the participant still has a rollover account at that company. It was our company (last employer) policy to always get a new distribution form when the election was a rollover if the form was more than 90 days old, but we allowed a longer time frame if the participant chose a direct payment (assuming they would not move addresses)