Distributions to Lost Participants with Balances < $1000

[Guest Margaret25]

We are trying to assist a bankrupt company with the last few distributions from their terminated DC plan.

They have a few participants with balances under $1,000 that cannot be located and the custodian of their current funds does not have an auto rollover program, even for the $1000+ range and the IRS forwarding program has been tried without success.

Would it be best to forfeit the small balances and have the employer use the forfeitures to pay fees or just have the trustee hold onto the balances in case the missing participants ever show up?

If we can find an administrator that will accept rollovers of low balances could the fees be charged to the plan?

Any help or suggestions would be greatly appreciated.

[Guest DazedAndConfused]

bumping this up since I have the same situation. I have a termianted plan with a few missing participants with less than $500. Every search has been done & we don't know what to do. Can we apply the plan expenses to these accounts to get rid of them? The amount in the plans are less than what it would cost to set up a rollover IRA anyway. Thanks!

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The DOL's FAB 2004-2 will give you the procedures and distribution methods you can use for terminated DC plans.