PPA Distribution Notices

[Guest willz09]

It seems that an additional Distribution Notice is required to be provided to a participant in addition to the "Special Tax Notice" and the Distribution Form (which we prefill with vesting and fee information) from (John Hancock, ING, etc.). It also seems that if the participant's distribution amount is less than $5,000 ... then this extra notice is not required - is that correct? Are any of your firms preparing this "additional" notice that seems redundant? If so, are you preparing them for all distributions or just for those with less than $5,000? Any responses or thoughts would be greatly appreciated. Thank You!

[Bird]

That's a little vague...I think you might be talking about the "right to defer" notice; does that sound right? If so, it depends on plan cashout language - if a participant doesn't have to take a distribution, you must explain their right to defer and the consequences, including fees that apply. We're doing a separate notice, but I suspect there is widespread noncompliance.