Rollovers of 'mandatory distributions'

[Tom Poje]

When do they occur?

I don't mean when does the law take effect, but what triggers them?

Is it simply that an ee quits with a balance/PVAB less than $5000 you have to do it 'immediately' , or the famous 'when administratively feasable' - e.g. the administrator doesn't even know who quits until the annual census info comes in.

[Belgarath]

Tom - I'd have to go back and read the release to be sure, but offhand, I don't recall any change in the requirements for the timing of the distribution. The plan document still governs, etc... so the only change is that once you are ready to make the payout, under the same timeframes you would otherwise have used, you now have the mandatory rollover requirement.

[Tom Poje]

thnaks for anything you can find.

the wording in the EGTRRA under the section

Certain Mandatory Distributions

(ii) Eligible Plan..the term eligible plan means ....present value does not exceed $5000 shall be IMMEDIATELY DISTRIBUTED to the participant.

now, the Federal Register (vol 69, no 187) indicates a new section IV(i) defines the term Mandatory Distribution [can't say I have found that term defined in the misc. stuff I have printed in regards to this issue]

I have some mental problems with seeing terms like "Mandatory" and "Immediately distributed", and the boss here just returned from a meeting which seemed to indicate 'immediate' means what it says.

[Belgarath]

Sorry - hit wrong button. Reply coming.

[Belgarath]

FWIW

Tom - The DOL release just refers to the code - it doesn't impose any new "immediate" requirement.

Code 401(a)(31)(B)(ii) as amended by EGTRRA 657, refers to an "eligible plan" as one where the benefit not exceeding 5,000 shall be "immediately distributed." I interpret this merely to distinguish a plan that provides for mandatory distributions of cash out benefits from a plan that does NOT provide for them.

So I don't see that any change is required from whatever you do now, other than the mandatory rollover of the cash out benefit, when paid.