Plan Termination - unresponsive participants

We have a plan that is terminating with Transamerica.  Several participants will not return their distribution forms.  This is an FIS/PPD DC document.  I know most will say - what does the plan document say?  It is very ambiguous in my opinion.  These are participants with more than $5,000 and they are not "lost."  The plan is not subject to QJSA.  We want to simply roll them to a default IRA with Millennium Trust if they continue to ignore the distribution forms.  The assets are enough where I don't want to take chances - in total about $25,000 for 3 people.

Thank you in advance for your comments.

Tom

Have you asked FIS/PPD?

IMO, I think rolling over to default IRA is the "best" of the allowable options available in these situations and personally I would not have any problem with sending the funds to a rollover IRA if good faith effort to get these non-responsive participants out of the Plan to facilitate the final distribution of assets in conjunction with the Plan termination.

What are your other options? Send to PBGC program? Send them a taxable check less federal withholding and tell them they have 60 days to rollover? I think it's clear you're not required to keep the trust open for non-responsive participants just like you're not required for missing ones.

Creative action?  Maybe send a letter suggesting (without really promising) that, absent a signed election form received by X date, the benefit will be distributed to you, with applicable withholding, and will be reported to the IRS as a taxable payment.

IOW, see if they call your bluff.

Is there a separate document section for plan termination, compared to the regular rules for distribution of benefits?

Also, add that there will be fees deducted from the IRA for maintaining it

If a plan’s governing document is ambiguous, one might remove an ambiguity by amending the document.

Might the plan sponsor amend the plan to provide that, if the administrator has not received other instructions, the final distribution is delivered as a rollover to a default IRA?