taxllm Posted February 13, 2014 Posted February 13, 2014 Client is terminating a DB and 403(b) plan and need a default IRA provider that would accept balances from both plans for participants who do not respond. Can anybody recommend some providers? Thank you.
Rball4 Posted February 13, 2014 Posted February 13, 2014 Note, when terminating a DB plan, you cannot move the monies for missing participants into an IRA. The PBGC will not accept this due to the IRA's fees. They will need to go through the PBGC's missing participant program.
taxllm Posted February 13, 2014 Author Posted February 13, 2014 For the DB plan the transfer would be only for small balances.
Rball4 Posted February 13, 2014 Posted February 13, 2014 In the past we have used Inspira out of Pittsburgh, PA.
shERPA Posted February 13, 2014 Posted February 13, 2014 Penchecks Trust, http://www.penchecks.com/ also does missing participant IRAs, will search for the missing participants and enter their data in their free online database, http://www.unclaimedretirementbenefits.com. Before paying to an IRA, the plan sponsor needs to make a diligent effort to locate participants, simply "not responding" is not sufficient before defaulting to a IRA. See DOL FAB 2004-2. I also echo the PBGC caution expressed above. Years ago we did IRAs for two small DB benefits in a PBGC-covered plan. PBGC required us to send to them instead. I carry stuff uphill for others who get all the glory.
My 2 cents Posted February 18, 2014 Posted February 18, 2014 My understanding: Under $5,000, OK to put proceeds into default IRA. Over $5,000, pay to PBGC as missing participants. Participants under $5,000 whose whereabouts are known but who do not respond = OK to put in default IRA. Ditto for such participants if a "diligent search" has been conducted (whatever that means in the Internet Age). Always check with your actuary first!
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