Automatic Rollovers-Amending

[Guest padmin]

During the GUST restatment process we included a "default" $5,000 cash out level

for our prototype plans. The corbel ammendment package allows the document sponsor to 1.) keep the $5,000 threshold andprocess automatic IRA rollovers, reduce or eliminate the provision. Only one may be chosen at the prototpye sponsor level. Our initial impression was to keep the $5000 threshold as our sponsor level amendment but we are begining to think that this will require us to be proactive with our clients on this issue and do more "unpaid" work. What are others thinking in relation to adminstrative complexity?

[Guest pensionadmin]

We are going with reducing the cashout level to $1,000 on the sponsor level. Then if clients want to go with direct rollovers, they can elect out of the cash out default. We have many small plans that seldom utilize cash outs at all so we think this is the best route.

[stevena]

We gave the employer the option to eliminate cash outs or set up the auto rollovers, but we are urging them to eliminate the cash outs, for many reasons. Some of them are amending to eliminate cash outs under $1000, but most are amending to eliminate under $200. We havent had anyone (yet) who wants to go with the rollovers.