Can distributions be forced in this case?

[John A]

The sponsor of a 403(B) plan basically merged into another entity. The majority of participants rolled their 403(B) accounts into a plan of the new entity. The old entity was covered by ERISA and so is filing 5500s. There are a few employees who have not yet gotten their money out of the old 403(B) plan. One of these employees has a segregated account, the rest are in a pooled account. Can the trustee of the 403(b)plan force the participants to either roll the money into a new plan or take a distribution?

The trustee wants to file a final 5500 ASAP.

[Carol V. Calhoun]

There are no specific provisions for requiring a distribution in this case. However, some have suggested that if employees are issued individual annuities, the employer can stop filing Forms 5500 on the theory that it no longer has any involvement. Unfortunately, the authority on whether this works is pretty much nonexistent, so you have to assess the risks.

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