Money Purchase Plan

[PS]

Hi, 

One of the terminating plan there are few participants with balance in the MPP source, this was from the pervious plan.  The plan has elected for optional, so if a participants does not take action can the plan sponsor direct to have the funds rolled over to an IRA account for the ones who have balance in the MPP source? or should it be an Annuity? 

Thanks 

[CuseFan]

MPP source is subject to QJSA rules, so w/o participant waiver/consent and spousal consent, if applicable, you must purchase an annuity. That's why clear communication, forms and follow up are so important. 

If you tell someone, hey, if you don't return your properly completed forms, then instead of getting that $20,000 portion of your account you'll get $25/month 10 years from now when you're 65, they'll likely respond. 

[PS]

Yes, the communication and forms will be sent.  but if they don't respond can it be rolled over to an IRA account? 

[Bill Presson]

43 minutes ago, PS said:

Yes, the communication and forms will be sent.  but if they don't respond can it be rolled over to an IRA account? 

No. If they don't respond they get the annuity.

[PS]

That's what I thought, thanks for confirming. 

[PS]

Is there any document that I can refer since my client is looking for some kind of reference material on this. 

[Belgarath]

I assume your plan document is an IRS pre-approved document? If so, it should already have this language. Admittedly, sometimes rather convoluted to wade through it....

[BG5150]

I think the PBGC will take the funds...

[CuseFan]

2 hours ago, BG5150 said:

I think the PBGC will take the funds

Great point! I know that on a DB termination PBGC considers an unresponsive participant as missing, I don't know if consideration extends to DC plans or the participant must be truly missing.

[BG5150]

They do:

 

https://www.pbgc.gov/prac/missing-participants-program

[PS]

Thank you 🙂