Notice of optional form of benefit elimination

[Guest hyper]

A 401(k) plan is eliminating an optional form of benefit. I thought the 411 regs. required the plan to provide notice to employees at least 90 days before the distribution option was eliminated. I have just been advised that EGTRRA amended the statute and removed this requirement, so the notice requirement in the 411 regulations no longer apply.

Is a Plan still required to provide at least a 90 day notice of elimination of an optional form of benefit. I understand it is good PR, but is it requried ? Anyone know where I can look in EGTRRA to confirm the statute was amended ?

Thanks.

Hyper

[WDIK]

EGTRRA did have provisions that (relating to the transfer of benefits from one DC plan to another) allow plan features to not be protected if the member consents and:

– The transfer is a direct transfer,

– The transfer is allowed by both plans,

– The member received proper notice and elected the transfer, and

– The member could have elected a lump sum.

This link may help.

[Guest hyper]

Thank you, great link.

After reading article and the proposed regs. , the elimination of the 90 day notice is not final until the regs. are final and have been published in the Fed. Reg. but good to know the change is coming.

Thanks again.

[four01kman]

Final regs issued in the 3/24/04 Federal Register, pages 13769 - 13786. Haven't had a chance to read them yet.

[Lynn Campbell]

Re removal of optional form of benefits: for example a profit sharing plan which eliminated all Joint & Survivor options in its GUST amendment and includes only the lump sum option now: do these new regs mean that the lump sum option can be used as the only payout option now, without waiting for the 90th day after the employees have been notified of the change?