SSA - from the year 2000!

[RestAssured]

I filed a Schedule SSA with the 5500 of a PS 401(k) back in the year 2000, for a missing participant with a balance of $217. Since then, back in the mid-2000's time frame, this plan closed. This girl's $217 was not a thought in my head, and guess what? She has filed for some sort of SS benefits, and they've given her notice that she has $217 in this old, closed plan.

What do I tell her?

Thank you!!!!!!

[ESOP Guy]

Was she due the benefit when the plan terminated?

[RestAssured]

Well, no. We forfeited her balance back to other participants in the year 2000, after strenuously trying to locate her. Didn't think about it in 2005 (approx year of termination of plan).

[masteff]

What happened to the employer / plan sponsor? If they still exist, it might be cheapest for them to just send $217.

[RestAssured]

Nope. They are closed up.

Did I mess up?? If so, I may need to send her $217, although I reeeaaaaalllly don't want to. Hopefully I did nothing wrong ~ I am also curious, if I 'did' mess up, what would have been the proper thing to do? File an SSA with the Final 5500?

Thanks for your answers!

[BG5150]

Give her a list of all the people who cased out in the plan term and tell her to contact them for 45 cents each, the portion they got of her forfeited money...

[RestAssured]

BG5150, while this was my thought too, on a serious note ~ can I just tell her that without being able to locate her at that time, her money was forfeited to remaining participants, and the plan and employer have closed?

Thanks!

[masteff]

Post #9 here: http://benefitslink.com/boards/index.php?/topic/27828-missing-participant-in-an-ongoing-ps401k-plan/

I'd simply respond about the efforts made to locate her in 2000 and having been unsuccessful, the account was forfeited per 1.411(a)-4(b)(6) and that unfortunately both the plan and the plan sponsor have ceased to exist so no one remains to restore the benefit.

However, just thinking a bit further, if the company was a sole proprietorship or if the company was bought out by another in a stock purchase, they might be on the hook for it. Hopefully your scenario is open and shut with no potential successor.

And you'll find that while it's getting less common, former participants getting notice about no-long-existing benefits is a long-standing annoyance for lots of plans.

http://benefitslink.com/boards/index.php?/topic/44732-participant-not-deleted-from-ssa-after-payout/

http://benefitslink.com/boards/index.php?/topic/51349-inaccurate-notice-of-benefit-from-ssa/

[Bill Presson]

Don't overlook the fact that it's only $217 though. It might really be worth your while to send her a check as long as she signs a "hold harmless" instead of getting into a letter duel.

[ESOP Guy]

First off if the plan forf the money she was still due the benefit when the plan was termianted. If you read that part of the plan document and the related rules forf the money doesn't change the fact she was due the money. If the employer still existed they would owe her the money. Since the employer doesn't exist she might be out of luck. Although I do agree for such a small amount what is legal/right vs practical is worth thinking about. My guess is she isn't going to lawyer up for $217 either so not sure how much saber rattling is going to happen here.

[Kevin C]

What does the plan say? Our VS document has the following:

However, if a missing Participant or Beneficiary has not been located by the time the Plan terminates, the forfeiture of such Participant’s or Beneficiary’s distributable amount will be irrevocable.

[ESOP Guy]

What does the plan say? Our VS document has the following:

However, if a missing Participant or Beneficiary has not been located by the time the Plan terminates, the forfeiture of such Participant’s or Beneficiary’s distributable amount will be irrevocable.

That is interesting. The guy who trained me in this business used to say 99% of all questions can be answered by reading the document.

[Lou S.]

I'd tell her to contact the Plan Sponsor. Yes I realize they are out of business in this case, but I don't think that changes the answer.

I guess now it wouldn't be an issue since instead of forfeiting it would presumably be rolled over to an IRA in the missing participant's name but that's now and not 2005.