What rights does a participant have when an employer fails to give a 4

[EGB]

Participant received a distribution without being given any rollover notice and/or forms to roll the money over. Employer issued participant a 1099. Four months have passed since the distribution. What can the participant do, if anything, to avoid income taxation? Does participant have any recourse against the employer (assume this is the first time the employer has failed to give the notice to any of its participants). It appears to me there is not much the participant can do other than to bring some type of claim under ERISA. Any thoughts would be appreciated.

[EGB]

In response to Anthony Belbis' questions:

The amount exceeded $5,000 and the entire amount was an eligile rollover distribution. (why does this matter? Even if it is less than $5,000, it is still an eligible rollover distribution).

Participant is single; only lump sum distributions (no QJSA/QPSA).

[KJohnson]

I am not sure whether not sending a 402(f) notice is a violation of 401(a)(31) and therefore a disqualifying defect. However in September 1998, BNA published over 120 corrections that the IRS had accepted in VCR. One of these treated the faiulre to give a notice under 402(f) as a 401(a)(31) violation and permitted the following correction:

Issue corrective notices to affected participants. The employer will also offer each participant not electing a direct rollover the opportunity to repay the distribution within three months and elect an eligible rollover distribution.

I don't recall seeing anything regarding APRSC on this issue.

[This message has been edited by KJohnson (edited 04-03-2000).]