De minimis exception to requirement to allocate earnings to participants?

[Guest rocnrols2]

There are many situations with daily valued plans where a distribution is made and then dividends or other earnings become payable later. This can happen when a plan changes recordkeepers or when a plan terminates. For example assume that the plan transfers assets either to all participants or to a new recordkeeper. When the check for additional earnings comes in, it is for such a small amount that participants would be entitled to either less than $10 or $1. If a participant terminates and receives a lump sum, the receipt of the additional check would require the plan administrator to chase after the former employee and pay it to him/her. These small earnings checks are recurring and the administrative burden of both allocating the earnings and attempting to pay them to participants substantially exceeds the dollar amount of these checks. What are recordkeepers and plan administrators doing in this situation?

[FundeK]

From the Reish, Luftman, Reicher & Cohen website:

Technical Tip 119: The following question and answer were from the IRS Q&A Session at the 2002 ASPA Annual Conference:

Profit sharing plan is terminating. Many of the account balances (which include forfeitures, etc.) are under $15. Is there a di minimus amount that the plan administrator is allowed to ignore when going through the distribution process? The postage and handling would be more than the amount of the distribution for many of the participants.

Response: There is no di minimus rule.

At my former place of employment, they chose to always pay out $ attributable to employee deferrals. If the balance contained any deferrals, it was paid. If the balance was all attributable to match or PS, and we under $10.00 it was forfeited.

Was that right??? Who knows....