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Posted

Seeing as how 401(a)(31) is a statutory provision, does a Plan need a separate document provision electing to be able to use an automatic rollover, or is it available to any Plan the claims qualification under 401(a)?  The DC LRM from 10/2017 includes a required provisional statement about automatic rollovers, that references the mandatory distribution section, but no adoption agreement provisions are noted as needing to be included.  Also, the mandatory distribution section the LRM notes that should be included, is not addressed anywhere in the LRM.

Posted

I think your plan document still has to have forceout provisions in it to start.  (Is that the question?  Whether or not you can use the auto-IRA rules if they're not in the document?)

I think 401a31B is saying you have to auto-IRA balances only if you're mandating the distribution and it exceeds 1,000.  But the plan would have to provide for the mandatory distribution in the first place.

Posted

Bri is correct - there are two pieces in play here: (1) does the plan provide for mandatory cash-outs (a) under $5,000, (b) under $1,000, or (c) not at all; and (2) if (1)(a) then the document must have the default IRA rollover provision for distributions between $1,000 and $5,000, and could allow for distributions less than $1,000.

Kenneth M. Prell, CEBS, ERPA

Vice President, BPAS Actuarial & Pension Services

kprell@bpas.com

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