['Retirement Benefits']
['Employee Retirement Income Security Act (ERISA)']
09/05/2024
Copyright 2024 J. J. Keller & Associate, Inc. For re-use options please contact copyright@jjkeller.com or call 800-558-5011.
...
NOTICE OF PLAN TERMINATION
[ Date of notice ]
[ Name and last known address of plan participant or beneficiary ]
Re: [ Name of plan ]
Dear [ Name of plan participant or beneficiary ]:
{ Insert as applicable [We are] or [I am]} writing to inform you that the [ name of plan ] (Plan) has been terminated pursuant to regulations issued by the U.S. Department of Labor. The Plan was terminated because it was abandoned by [ name of the plan sponsor ]. { For plans deemed abandoned pursuant to 29 CFR 2578.1(j)(2), replace the immediately preceding sentence with: The Plan was terminated because [name of the plan sponsor] is in chapter 7 bankruptcy and the business is shutting down.}
We have determined that you have an interest in the Plan, either as a plan participant or beneficiary. Your account balance on [ date ] is/was [ account balance ]. We will be distributing this money as permitted under the terms of the Plan and federal regulations. The actual amount of your distribution may be more or less than the amount stated in this letter depending on investment gains or losses and the administrative cost of terminating the Plan and distributing your benefits.
Your distribution options under the Plan are { add a description of the Retirement Plan's distribution options }. It is very important that you elect one of these forms of distribution and inform us of your election. The process for informing us of this election is { enter a description of the election process established by the qualified termination administrator }.
{ Select the next paragraph from options 1 through 4, as appropriate. }
{ Option 1: If this notice is for a participant or beneficiary, complete and include the following paragraph in cases in which the account balance will be distributed in accordance with the conditions of §2550.404a-3(d)(1)(i) or (ii). }
If you do not make an election within 30 days from your receipt of this notice, your account balance will be transferred directly to an individual retirement plan (inherited individual retirement plan in the case of a nonspouse beneficiary) maintained by { insert the name, address, and phone number of the provider if known, otherwise insert the following language [a bank or insurance company or other similar financial institution]}. Pursuant to federal law, money transferred to an individual retirement plan will be invested in an investment product designed to preserve principal and provide a reasonable rate of return and liquidity. { If fee information is known, include the following sentence: Should your money be transferred into an individual retirement plan, [ name of the financial institution ] charges the following fees for its services: { add a statement of fees, if any, that will be paid from the participant or beneficiary's individual retirement plan }.}
{ Option 2: If this notice is for a participant or beneficiary whose account balance will be distributed in accordance with the conditions of §2550.404a-3(d)(1)(iii)), complete and include the following paragraph. }
If you do not make an election within 30 days from your receipt of this notice, and your account balance is $1,000 or less, federal law permits us to transfer your balance to { insert whichever is applicable: “an interest-bearing federally insured bank account;” “an unclaimed property fund of the State of your last known address;” or “an individual retirement plan (inherited individual retirement plan in the case of a nonspouse beneficiary).”} { If the transfer will be to an individual retirement plan, insert the following sentence: Pursuant to federal law, your money would then be invested in an investment product designed to preserve principal and provide a reasonable rate of return and liquidity.} { If known, include the name, address, and telephone number of the financial institution or State fund into which the individual's account balance will be transferred or deposited. If the individual's account balance is to be transferred to a financial institution and fee information is known, include the following sentence: Should your money be transferred into { insert whichever is applicable: “an individual retirement plan” or “bank account,” [ name of the financial institution ] charges the following fees for its services: { add a statement of fees, if any, that will be paid from the individual's account }.}
{ Option 3: If this notice is for a participant or beneficiary whose account balance meets the conditions of §2550.404a-3(d)(1)((iv), complete and include the following paragraph. }
If you do not make an election within 30 days from your receipt of this notice, and your account balance is $1,000 or less, federal law permits us to transfer your balance to an individual retirement plan (inherited individual retirement plan in the case of a nonspouse beneficiary). Pursuant to federal law, your money, if transferred to an individual retirement plan would then be invested in an investment product designed to preserve principal and provide a reasonable rate of return and liquidity. However, if after exercising reasonable and good faith efforts, we cannot find an individual retirement plan provider who will accept your balance, we will transfer the balance to an interest-bearing federally insured bank account or to the unclaimed property fund of the State of your last known address. { If the bankruptcy trustee or eligible designee knows where it will send the participant's or beneficiary's money, modify the preceding sentence accordingly and include the name, address, and telephone number of the financial institution or State fund into which the individual's account balance will be transferred or deposited. If the individual's account balance is to be transferred to a financial institution and fee information is known, include the following sentence: Should your money be transferred into { insert whichever is applicable: “an individual retirement plan” or “a bank account,”}, [ name of the financial institution ] charges the following fees for its services: { add a statement of fees, if any, that will be paid from the individual's account }.}
{ Option 4: If this notice is for a participant or participant's spouse who will be distributed an annuity under §2578.1(d)(vii)(B)(2) to meet the survivor annuity requirements in sections 401(a)(11) and 417 of the Internal Revenue Code (or section 205 of ERISA), complete and include the following paragraph. }
If you do not make an election within 30 days from your receipt of this notice, your account balance will be distributed in the form of a qualified joint and survivor annuity or qualified preretirement annuity as required by the Internal Revenue Code. { If the name of the annuity provider is known, include the following sentence: The name of the annuity provider is [ name, address and phone number of the provider ].}
For more information about the termination, your account balance, or distribution options, please contact [ name, address, and telephone number of the qualified termination administrator and, if different, the name, address, and telephone number of the appropriate contact person ].
Sincerely,
[ Name of qualified termination administrator or appropriate designee ]
[ Name of plan ]
[89 FR 43665, May 17, 2024]
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['Retirement Benefits']
['Employee Retirement Income Security Act (ERISA)']
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Copyright 2024 J. J. Keller & Associate, Inc. For re-use options please contact copyright@jjkeller.com or call 800-558-5011.