Historial lump sum auto-distributions (looking for 2001)

[hr for me]

(Behind the scenes I am trying to figure out why the prior HR person didn't auto-distribute to a terminated person even though she wrote him a letter stating that she would do so if she didn't get the forms returned by October 2001. His balance at 3/31/01 was approximately $2700 and there were no future contributions. She took this language directly from a letter from the plan recordkeeper as they were terminating the plan. His money was left in the plan until he requested a distribution in 2006 -- by 06, his balance was almost $4,000).

I remember that the amount that could be auto-distributed out to a terminated employee changed, but I can't remember when or by how much. It added on a chance to rollover to an IRA between two amounts also. Is there anyone out here that remembers where that amount stood in 2001? And when the change occurred?

I know sometimes it can be dependent on the plan, but I am mostly looking for what the IRS/DOL would have allowed in 2001 to see if that is the possible answer to why the scenario above occurred.

Unfortunately I was out of the 401k side of the business from 1999 to 2005.

[JanetM]

On or before 8/04/1997 the max for force out was $3,500, after 8/05/1997 the limit was $5,000. Effective date that changed rule so you could not force out more than $1,000 was 3/28/2005. For the amounts over $1,000 and under $5,000 you had to get the signed request from the participant.

This participant did request lump sum. Is it possible that the prior HR person lost him? He could have moved and not update the address.

[GBurns]

I do not know the answer, but wonder Why does it matter anyhow ? Is there something that you think that you can do about the amount distributed in 2006 ? Do you thnik that you can go back and correct the failure to distribute as warned in the letter ?

[hr for me]

Thank you so very much. I knew someone would have the answer. I usually try to research myself, but I don't have a whole lot of time before I have to explain this to our CEO!

Actually the participant did not move however there was some type of problem with the mail. The Post Office decided they didn't like his address anymore (changed a county road/rural route address).

Unfortunately, I was not here when all of this went down. The first I heard of this was when he requested a distribution in 2006.

George --- no I don't want to change it now, but I was wondering if maybe the participant hadn't been given bad information in the first place (about the fact that he could have been auto-distributed) or if his account balance had been too high to have a forced distribution. There is nothing in the file to show why he was not auto-distributed so I was just grasping at straws....in case I get asked.