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When a daily valuation call center representative is speaking to a terminated participant about distribution paperwork, the timing of a cash payout or rollover may be a question that the participant asks about.

When a DC or DB Plan includes autorollover provisions, terminated participants should be warned that the plan trustees have the authority to effect an automatic rollover on their behalf – if the individual does not return distribution elections promptly after the 30-day consideration period. 

The Pension Protection Act requires communications to potential distribution recipients – to explain the consequences of deciding NOT to defer retirement distributions by electing postpone or rollover.

When a daily valuation call center representative is speaking to a terminated participant about distribution paperwork, the steps to complete the distribution paperwork for smooth processing of benefits may be a question that the participant asks about. 

When an employee terminates employment after participating in a Defined Benefit Pension Plan, the individual may have questions about the Waiver of a Qualified Joint & Survivor annuity and getting spousal consent witnessed by a notary public. 

As part of the Pension Protection Act warning messages regarding the consequences of NOT continuing the tax-deferred status of retirement savings, the 402(f) tax and rollover notice includes information about the 10% early penalty tax that typically applies to distribution recipients who take a cash distribution before the age of 59-1/2. 

The advantages of continuing the tax-deferred status of retirement savings accounts, in contrast with the consequences of a participant or beneficiary opting to take a cash distribution of retirement plan benefits are clear-cut, but deciding between the different methods of continuing the tax-deferred status of retirement savings accounts requires a more complex analysis.

The IRS proposed regulations on participant rights to defer retirement plan distributions indicate, in the case of a defined contribution plan, disclosures must ultimately include a statement that some currently available investment options in the former employer’s plan may not be generally available on similar terms outside the plan. 

Participants entitled to retirement plan distributions from a 401(k) plan should be provided with information about the impact of the Plan Expense Policy -- as far as administrative expenses that may be charged against their accounts for distribution paperwork mailings and/or any account maintenance charges that will be imposed if an election is made to postpone the timing of benefit payments. 

For participants in a defined benefit plan, the Department of Labor permits fees for processing a plan distribution to be offset against a participant’s vested benefits, but only if the total vested benefit amount is greater than $5,000.