Automatic/Forced IRA Rollovers

[ljr]

We are trying to work out an arrangement where a bank would accept these accounts. Their IRA service provider advises that they can only accept these accounts from "recently" separated participants and not "lost" participants. So, the bank wants to define "recently" which we understand is not defined in the final regulations. Other providers I'm working with do not make any distinction between "recently" separated and "lost" participants. They will accept accounts as requested by Plan Sponsors with whom they have agreements to provide this service. Reality indicates since the forced IRA rules are so new, plan sponsors may have a backlog of participants who may be "lost" at this point. Can anyone shed any light on this?

[Alf]

It may be an operational violation to cash out prior terms that were backlogged. If the plan says to cash them out at a certain time and that did not happen, it shouldn't be done now.

Otherwise, we have not heard of providers making this distinction, but can understand why they wouldn't want the lost particiipants.