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Cash-Out Distribution Plans Require Amendment

Qualified retirement plans that provide immediate cash-out distributions to a terminated participant if the vested benefit is "$5000 or less" must be amended to comply with Department of Labor (DOL) final regulations. The final regulations are effective for rollovers of mandatory distributions made on or after March 28, 2005. The final regulations provide a safe harbor for fiduciaries of tax-qualified pension plans that are required to roll over plan benefits into an individual retirement plan when a terminated employee fails to elect a distribution method.

8 minute readDecember 27, 2004 at 10:15 AM
By
Ruth Wimer
Alice Kurtz
Cash-Out Distribution Plans Require Amendment

Qualified retirement plans that provide immediate cash-out distributions to a terminated participant if the vested benefit is “$5000 or less” must be amended to comply with Department of Labor (DOL) final regulations.

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