Nonspouse Beneficiaries - Automatic Rollover Inapplicable

[rocknrolls2]

I am looking at a contract with an IRA vendor for purposes of implementing the automatic rollover process. According to IRS Notice 2007-7, the PPA expansion allowing nonspouse beneficiaries to make rollovers does not apply for purposes of Code Section 401(a)(31)(B), the automatic rollover provisions. Does this mean that if one extends the automatic rollover provision to nonspouse beneficiaries, the automatic rollover does not get the protection of ERISA Section 404©(3)?

[masteff]

Definitely would not be able to rely on the 404(a) safe harbor procedures established by DOL for automatic rollovers http://www.dol.gov/dol/allcfr/ebsa/Title_2...2550.404a-2.htm (which in turn gives the 404©(3) protection). I think you could still be protected but would be based on facts and circumstances. Certainly following the safe harbor would be a very good place to start.

Edit: Actually, on re-reading, due to how the safe harbor is written, if the rollover is $1000 or less, then it would fall into paragraph (d) and therefore be under safe harbor.

[rlb64]

I don't understand this discussion. I thought the cash-out and automatic rollover rules don't apply to death benefits. You can force any death benefit amount in cash to a spouse or non-spouse (with exception to the QPSA rule of course).