distributions to unresponsive participants

[Guest anne1]

I have read the 2004 FAB but am trying to determine, for an unresponsive participant with an account balance greater than $ 1000, in a terminating plan can we send him a check (assuming we have a good address) or must we roll his balance to an IRA?

Also, I understand that we can force out participants in a terminated plan even if their balances are greater than $ 5000 - agreed?

[ERISAnut]

Any forceout contributions that exceed $1000 must be automatically rolled into an IRA. You can force out balances that do not exceed $5,000, but if the balance exceeds $1000 then the auto rollover rules apply.

Based on what I remember, the automatic rollover rules can be used in the terminating plan since the distribution of plan assets is mandatory. The notion of sending to a last known mailing address does not fly.

[Guest mjb]

IRS reg 1.411(d)-4 Q-2(b)(2)(vi) permits a terminating plan which is not subject to the funding provisions of IRC 412 to issue an involuntary lump sum cashout to a participant by amending the plan to permit lump sum payment w/out participant's consent. Employer may not maintain any other DC plan.

[Blinky the 3-eyed Fish]

The lump sum payment is without the participant's consent surely. It's just that the money needs to go into an IRA, not to the last know address, if above $1,000.

[Guest mjb]

Where is that required? There is no requirement that a terminated plan payout all benefits immediately.

[GBurns]

"There is no requirement that a terminated plan payout all benefits immediately."

Was someone's post deleted? How did "immediately" get into this issue?