Automatic Rollovers

[ratherbereading]

I have a DC plan that allows terminated participant account balances between $1000-$5000 to be rolled over into an IRA without participant consent. The PPA doc does not address balances under $1000. Can these be cashed out without participant consent?

[Belgarath]

Very doubtful that this is not addressed in the document, particularly since the 1,000-5,000 is addressed. It may just be a bit "hidden" or under some default, etc. - is it a pre-approved doc? If so, and after further research you still can't find it, you can probably contact your document provider to ask where the provision is.

If you have the $1,000-$5,000 mandatory rollover, pretty likely that <$1,000 can just be distributed.

[TPAJake]

Agreed that the Plan should dictate. Under $1000 is generally distributed in cash if the Participant is unresponsive, but if the Participant is "lost" & the notices are returned as undeliverable, you have a different situation. You cannot send the check to nowhere. In that case, the only way to get them out is with a Trustee agreement to an IRA provider that will accept accounts less than $1000. I know of only one provider that will accept an IRA rollover under $1000, Inspira.