Plan termination payouts

[pmacduff]

We have a long term balance-forward client plan where we, as TPA prepare the distribution paperwork and subsequent reporting (ie. 1096, 1099-Rs, 945 etc.).  The client handles the actual payout from the investment funds based on the completed distribution form when returned.  Said plan is now terminating. 

The client has valid contact information for the vast majority of the participants - address and such - so we'll prepare distribution paperwork for those folks.  There are a few former employee participants, however, where the client has no valid contact information and only "old" addresses.  Let's say there are 5 people and the total of their balances is only about $13k.  (Each individual balance is over $1,000.)  We're hoping to be able to send those funds to a vendor and they will set up the IRAs and take it from there.  

I have contact information for Penchecks and plan to call them, but am more or less wondering if others have experience with Penchecks or any of the vendors that have these services and what is the opinion on the process?

Don't have many balance forward plans left and plans that have terminated with the usual large 401k vendors (i.e Nationwide, AF, John Hancock, Empower, etc) have a pretty straightforward process for these types of "lost" participants to get them into an IRA or cashed out as applicable so that the plan can close down.

Thanks in advance.

[ESOP Guy]

We use Millennium Trust for most of our ESOP clients if they need to do a force out to an IRA.  It seems to work well.  I know they do a yearly search for the person as part of the package of holding the assets in an IRA.  

The one downside in my mind is the fees.  I am thinking it is around $50/year.  Pretty common price I find.  But on a $1,000 balance that take the first 5% or the ROR.  I don't think there is anyone a lot cheaper but just giving you my full opinion.   On smaller balances the IRA will be gone after a few years.  

They are in Oakbrook, IL as suburb of Chicago if that matters.  

[Larry Starr]

We use Millenium Trust also, but first we have a search firm that charges a whopping $10 for a search. We've used them for years and they have always found our missing individuals.  Just did one last week; took them less than an hour to find current address in Brooklyn for our lost beneficiary (in this case).  Did you do all the searches you are supposed to do; you don't mention that.

[pmacduff]

thank you both for the comments.

Larry - yes - Between us and the client we will be doing what we normally do to search for these folks.  

We're just now waiting on the client to confirm the final listing of those she cannot locate.

Client wants to try and have everyone paid out by 12/31 so I'm getting all the information together ahead of time for client's options for those we can't/don't find.

thanks again.

[Bill Presson]

I've used Penchecks for a lot of years and been very happy with their services.

 

WCP