Statements for Terminated Unvested Participants

I have a client who doesn't want to provide statements for terminated participants who are 0% vested, but have not yet been out 5 years therefore the money in the account has not yet forfeited (it's all Profit Sharing money).

Is there something in the regs that requires statements be sent to these participants?  Can someone point me to it, if there is, so I can provide it to the client?

Thanks in advance!

ERISA 105(a). The term "participant" as used here is defined in ERISA 3(7) and includes "employee or former employee."

That said, are you sure the plan doesn't have an immediate deemed cash-out provision for this situation?

14 minutes ago, C. B. Zeller said:

ERISA 105(a). The term "participant" as used here is defined in ERISA 3(7) and includes "employee or former employee."

That said, are you sure the plan doesn't have an immediate deemed cash-out provision for this situation?

The document just says Forfwiture occurs at the earlier of distribution or 5 years

Is there something we can add to modify that?

Our document contains this language:

Quote

 For purposes of this Section [forfeiture upon receiving a distribution], if the value of a Participant's vested Account balance is zero upon
Termination, the Participant shall be deemed to have received a distribution of such vested Account.

18 minutes ago, C. B. Zeller said:

Our document contains this language:

Thanks!  Let me see if I can get the language inserted into our documents!

23 minutes ago, C. B. Zeller said:

For purposes of this Section [forfeiture upon receiving a distribution], if the value of a Participant's vested Account balance is zero upon
Termination, the Participant shall be deemed to have received a distribution of such vested Account.

Where would you insert this into the document?  Would it go into the Force Out of Small Balances or the timing of Forfeitures?

It isn't uncommon to see it in the forfeiture section. 

Can I suggest if you have a pdf of the document to search for the word "deem" and make sure that provision isn't hiding some place in the document?

When I convert a new client in or get a client that is starting a plan that is one of the several word searches I run on the document as I write up a personal summary of the plan provision.   I am a bit shocked at all the different places that provision is hidden. 

56 minutes ago, metsfan026 said:

Where would you insert this into the document?  Would it go into the Force Out of Small Balances or the timing of Forfeitures?

Are you using a preapproved document? If so, I would recommend you talk to your document sponsor.

FWIW ours is in the the master text under the definition of Forfeiture. Says something to the effect of "if Terminated and 0% vested is deemed to have received a distribution in year of termination"