Terminated Participant Requests Distribution - No Forms

[KateSmithPA]

A client received a call from a former participant. He requested a cash out of his account balance in the plan. Balance is below $1,000 (about $980).

Can the client cash out the participant without having the ususal participant distribution election form completed?

Thank you.

Kate Smith

[pmacduff]

Does the plan allow for cashouts under $1,000? If not I say you need the form. I also think it offers some measure of protection to the Plan and the Employer/Sponsor to have a positive election form from the person to show they requested the payout.

Since the Employer must know where the participant is located, and the participant obviously wants the money, I would think the forms will come back very quickly.

my 2 cents.

[K2retire]

Whether or not they decide to persue the actual form, the distribution must be made at least 30 but not more than 180 after they provide the participant with a Special Tax Notice.