Involuntary Distributions

[Guest Frank Jackson]

Say an employer has two plans and a participant is in both plans. His balance in plan I is 2000.00 and his balance in plan II is 4000.00. Can he be distributed under the involuntary cashout rule in both plans or do the balances has to be aggregated (equaling 6000). (Say both plans allow involuntary cashouts for account balances less than 5000.00) Any regulations you have would help. Thanks.

[Richard Anderson]

Code Section 417(e) and 411(a)(11)(A) both refer to a plan. The regulations have examples of how to calculate the accrued benefit for the 5,000 limit. None mention aggregating plans for the limit. I'm sure the limit for the involuntary cash out rule is for each plan.