Automatic Rollover IRAs
How They Work
Effective March 28, 2005, distributions of a participant's vested account balance of less than $5,000, and more than $1,000, that are made without the participant's consent must be rolled over to an IRA.
Automatic Rollover IRAs are typically used to distribute an account balance of less than $5,000 belonging to lost participants, as well as to distribute the assets of a terminated plan's missing participants.
Automatic Rollover IRAs Benefit Plan Sponsors:
- Reduce Fiduciary Responsibility
As long as the Department of Labor's (DOL) Fiduciary Safe Harbor is satisfied, the fiduciary's obligations, with respect to the participant's benefit, end immediately upon the transfer of the benefit to the IRA.
- Reduce Administration Fees
» Automatic Rollover IRA Frequently Asked Questions's for Plan Sponsors