Guest bmurphy Posted March 23, 2004 Posted March 23, 2004 Assuming the participants whereabouts are known, is there any instance where a Profit Sharing plan can force pay a participant whose balance is over $5,000?
FundeK Posted March 23, 2004 Posted March 23, 2004 Does part of the balance include a rollover amount? I have seen documents written that force payment at NRA if the participant is terminated, regardless of balance.
Belgarath Posted March 23, 2004 Posted March 23, 2004 Agree with FundeK, but I might add that some plans do have a NRA of less than age 62. In this case, even if terminated, you can't force the payout until age 62. Under 1.411(a)-11©(4), it is the later of NRA or age 62.
Guest bmurphy Posted March 23, 2004 Posted March 23, 2004 Balance does not include any rollover monies. Participant is only 50 years old, she left her ex-husbands employ last year. Looking to determine if force pay was allowable. I can have her request a copy of plan doc or SPD to see what it says.
E as in ERISA Posted March 23, 2004 Posted March 23, 2004 The IRS and DOL have indicated that you can charge terminated participants for the administration of their accounts.
FundeK Posted March 24, 2004 Posted March 24, 2004 The IRS and DOL have indicated that you can charge terminated participants for the administration of their accounts. I am not understanding how this answers bmurphy's question. Can you please explain? Thanks! Is this the same person you posted about in this post? http://benefitslink.com/boards/index.php?showtopic=23651
E as in ERISA Posted March 24, 2004 Posted March 24, 2004 It's indirect. If the person was getting charged $100 for admin of their account in their ex-husband's plan (assuming that is justified by the costs of the plan), then they might choose to switch to a lower cost IRA. Of course, you would have to do the same for all terminated participants....
E as in ERISA Posted March 24, 2004 Posted March 24, 2004 Okay. Now I see that the distribution was already actually made -- without paperwork on behalf of the participant? And you're trying to justify it?
Guest bmurphy Posted March 25, 2004 Posted March 25, 2004 Not trying to justify it - I didn't feel it was done properly to begin with. I have contacted the TPA firm & they have indicated they will correct.
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