Involuntary cash-out in profit sharing plan offering annuities

[Guest nlmc18]

Is there any reason a PS plan with annuity options cannot be amended for the involuntary automatic rollover between $1000 and $5000? I question this because I have been told that these plans would need to be amended to reduce involuntary distributions to $1000 or less otherwise they must amend to eliminate annuity options. What about MP or DB plans that are required to offer the QJSA?

[Guest seissler]

Notice 2005-5 Q-13 asks:" If a plan is subject to the joint and survivor annuity and preretirement survivor annuity requirements of section 401(a)(11) and the plan provides that an accrued benefit greater than $1,000 but not greater than $5,000 will be distributed to a participant only with the consent of the participant, would a distribution of such an accrued benefit be subject to spousal consent requirements?" A-13 answers - "No. Section 1.417(e)-1(b)(2)(i) provides that no spousal consent is required before the annuity starting date if the present value of the nonforfeitable benefit is not more than the cash out limit in effect under section 411(a)(11).

Therefore the fact that a plan has annuity options should not prevent any of the various automatic rollover options from being available to such plan.