Change to force-out timing: a cutback?

[AlbanyConsultant]

Taking over a plan where the timing for distributions to participants with vested balances <$5K is immediate, and for those >$5K, it's as soon as administratively feasible after a BIS is incurred. We typically don't make that kind of distinction in distribution timing - we put in our documents that payouts are done as soon as administratively feasible after the end of the plan year regardless of the amount.

I'd like to not have this outlier for distributions if possible. Can I change the current provisions to what we're more accustomed to (the plan sponsor doesn't care)?

For the >$5K, I think our timing is going to be the same or sooner in all instances, so I'm OK with changing that side. But is it a cutback for the <$5K participants? And if it is... what's the downside? It might be worth incurring a little extra testing or whatever to ensure that we don't overlook the one plan with a different distribution timing feature.

Thanks.

[Bird]

I think it's a cutback and you just can't do it (for existing participants).

I think you could change it with a caveat "but for participants as of xx/xx/16..." and they will eventually either get to the higher threshold or leave the plan and get paid and thereby go away. It's a nuisance but leaving it as is is worse...it might be the best way to eventually get consistency.

[Mike Preston]

Isn't the $1,000 limit changeable? If so, it stands to reason that no 411(d)(6) rights attach to the timing.