Dazednconfused Posted February 8, 2011 Posted February 8, 2011 Plan is converting to different investment company, plan allows for in-service withdawals at 59 1/2 for all money sources. A participant does not want to change and just turned 60 and wants to roll out into IRA with current investment company before the conversion. However, the Trustee does not want to sign paperwork to authorize the in-service withdrawal. Anyone run into this before and what to do (yes, I guess I can say call the DOL but want to try to avoid that) ? Thanks!
david rigby Posted February 8, 2011 Posted February 8, 2011 Maybe I don't understand your terminology. If the plan allows in-service withdrawals and the participant is making that election, what does the trustee have to do with it (other than completing the distribution according to terms of the plan)? I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Belgarath Posted February 8, 2011 Posted February 8, 2011 David - at least for the plans we service, the Trustee is the "owner" of the funds, and a participant cannot sign for or authorize a distribution. The Trsutee must request the withdrawal for the various fund companies/custodians to disburse the funds.
rcline46 Posted February 8, 2011 Posted February 8, 2011 A trustee cannot interfere with the ERISA rights of the participants. An in-serive distribution is a right. I think the trustee is in the wrong based on the information given.
masteff Posted February 8, 2011 Posted February 8, 2011 However, the Trustee does not want to sign paperwork to authorize the in-service withdrawal. What reason has been given by the Trustee for refusing the sign the paperwork? (not that their reason is valid but at least it gives some idea of how to explain why they're in the wrong) Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra
Dazednconfused Posted February 8, 2011 Author Posted February 8, 2011 The Trustee simply said they didn't want them to take their money from the plan, no other valid reason was given by him. I will certainly discuss that this is allowed by the plan and they have the right to the distribution per the document. I just don't think that I have run into this before and was wondering if others have... Thanks,
K2retire Posted February 9, 2011 Posted February 9, 2011 Remind the trustee that failing to follow the terms of the document creates the possiblity for the entire plan to be disqualified, and that he or she probably doesn't want to be liable for that.
MoJo Posted February 9, 2011 Posted February 9, 2011 Perhaps the plan is in blackout as a result of the conversion?.....
Jim Chad Posted February 9, 2011 Posted February 9, 2011 Are the fees at the new investment company lower because of the large amount of money which includes this guys account?
GMK Posted February 9, 2011 Posted February 9, 2011 Remind the trustee that failing to follow the terms of the document creates the possiblity for the entire plan to be disqualified, and that he or she probably doesn't want to be liable for that. Unless a factor that has not been reported here or the Plan Document gives the Trustee veto power over document-authorized distributions, the Plan Administrator should not delay in getting the Trustee to sign or getting a different Trustee. Probably best to do both.
BG5150 Posted February 9, 2011 Posted February 9, 2011 Any restricted investments involved? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
K2retire Posted February 9, 2011 Posted February 9, 2011 Remind the trustee that failing to follow the terms of the document creates the possiblity for the entire plan to be disqualified, and that he or she probably doesn't want to be liable for that. Unless a factor that has not been reported here or the Plan Document gives the Trustee veto power over document-authorized distributions, the Plan Administrator should not delay in getting the Trustee to sign or getting a different Trustee. Probably best to do both. True, but difficult if the plan administrator IS the trustee!
Ron Snyder Posted February 15, 2011 Posted February 15, 2011 You could notify the participant that the trustee refuses to make the distribution, even though it is apparently provided for under the plan document. Also that you are unable to make the distribution yourself. Provide a copy of the appropriate section(s) of the plan, and remind him of the ERISA claims and claims review procedures (likely detailed both in the plan and in the SPD). You probably should not recommend that he consult with his attorney (at least in writing), as it could get you sued along with the trustee/administrator.
BG5150 Posted February 15, 2011 Posted February 15, 2011 You probably should not recommend that he consult with his attorney (at least in writing), as it could get you sued along with the trustee/administrator. And make sure you keep copies of all correspondence with the company, just in case you get thrown into a lawsuit, so you can show you were not complicit in not doing the distribution. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
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