Terminated Plan are 1099's Required

[DPSRich]

Have a 45 Participant Plan terminated effective March 2024. 6 of the Participants could not be located. Plan Sponsor sent the funds to Inspira, formerly Millenium Trust. Accountant says that each of the 6 Participants mus receive a 1099-R, even though technically they have not received the money. I agree that the money is out of the Plan, BUT is Inspira responsible for the 1099-R when the money is paid to the Participants.

Any help[ is greatly appreciated.

 

DPSRich.

[Bill Presson]

If the money left the plan and went to rollover IRAs, someone needs to generate a 1099. 
 

Who did the 1099s for all the rest of the participants? They would likely do these 6 as well. 

[DPSRich]

Thank you Bill. Accountant did the 1099R's for all other Participant's.  The other 6 could not be located and the sponsor sent the money to a company to hold it, so the Plan could be closed down totally.

Enjoy the rest of your weekend.

 

Richie

 

[Bill Presson]

1 hour ago, DPSRich said:

Thank you Bill. Accountant did the 1099R's for all other Participant's.  The other 6 could not be located and the sponsor sent the money to a company to hold it, so the Plan could be closed down totally.

Enjoy the rest of your weekend.

 

Richie

 

Well, the accountant should do these 6 as well. But if they won’t MT likely will. 

[david rigby]

3 hours ago, DPSRich said:

 The other 6 could not be located and the sponsor sent the money to a company to hold it, so the Plan could be closed down totally.

What does "hold it" mean?  IRAs?  Something else?

[DPSRich]

Thank you, will check tomorrow if rolled over to an IRA account, let you know then.

Richie

[ESOP Guy]

17 hours ago, DPSRich said:

Thank you, will check tomorrow if rolled over to an IRA account, let you know then.

Richie

You don't understand what Inspira does.  They set up IRAs for all those people.  They need a 1099-R with a G code. 

[DPSRich]

On 1/26/2025 at 12:18 PM, david rigby said:

What does "hold it" mean?  IRAs?  Something else?

Yes an IRA  account. Thank you.

 

[DPSRich]

On 1/27/2025 at 7:55 AM, ESOP Guy said:

You don't understand what Inspira does.  They set up IRAs for all those people.  They need a 1099-R with a G code. 

Great answer.  Thank You.

[TheBoxMan]

The timing is not clear in the question. Were the IRA rollovers done prior to the execution of a termination amendment? Was it done as part of the regular course of plan administration (provision in plan document and the plan does this every year with cash outs that they cannot locate)? If so, then the IRA is fine for these 6.  But, if this is a qualified pension plan and the plan was already in the process of terminating, then the funds cannot be rolled into an IRA for the missing participants. The plan must purchase annuities or send the money to the PBGC under the Missing Participant Plan rules.