![]() ![]() Under Title I of ERISA, we generally view the decision to terminate a plan as a “settlor” decision rather than a fiduciary decision. In the case of plan terminations, fiduciaries must also ensure that the allocation of any previously unallocated funds is made in accordance with the provisions of section 403(d) of ERISA. Section 403(a) of ERISA generally requires that a trustee must hold the assets of a plan in trust. Section 402(b)(4) of ERISA provides that every employee benefit plan shall specify the basis on which the plan makes benefit payments. Also, under section 404(a)(1)(D) of ERISA, fiduciaries are required to act in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of Titles I and IV of ERISA. Under the requirements of section 404(a) of ERISA, a fiduciary must act prudently and solely in the interest of the plan’s participants and beneficiaries and for the exclusive purpose of providing benefits and defraying reasonable expenses of administering the plan. This Bulletin takes these important changes into account, and also reflects some suggestions from the 2013 ERISA Advisory Council, which made a broad set of recommendations for retirement plans and lost or missing participants and beneficiaries. ![]() ( 6) At the same time, however, Internet search technologies have expanded and improved, and the Department has codified its enforcement safe harbor for distributing missing participant benefits to individual retirement plans. In particular, both the Internal Revenue Service (IRS) and the Social Security Administration (SSA) have discontinued their letter-forwarding services for locating missing plan participants in the years since the initial publication of FAB 2004-02. This Bulletin replaces Field Assistance Bulletin 2004-02 (FAB 2004-02) and reflects important changes that have occurred in the ten years since the publication of FAB 2004-02. The Bulletin’s aim is to help fiduciaries properly discharge their obligations to these missing participants. ( 4) This Field Assistance Bulletin (Bulletin) broadly refers to these unresponsive participants as missing participants. ( 3) Sometimes, however, participants fail to respond to the notices (or mail sent to their addresses is returned), creating a practical dilemma for the plan administrator who has a fiduciary obligation to search for missing participants and distribute their benefits. ( 2) This requirement extends to all participants, regardless of their length of service or the size of their account balances. ( 1) Before making a distribution, the plan administrator has a responsibility to contact the plan’s participants for directions on how to distribute their account balances. Under the Internal Revenue Code, a plan administrator must distribute all of a plan’s assets as soon as administratively feasible after plan termination. ![]() You will be charged a penalty if any statement made on the voucher is not true and accurate to the best of your knowledge.How can the fiduciaries of terminated defined contribution plans fulfill their obligations under ERISA to locate missing participants and properly distribute the participants’ account balances? Background You paid in, either through withholding taxes, estimated payments or both, more than 100% of your 2010 tax liability – If you owed $5,000 in income taxes in 2009 and you owe $50,0, as long as you paid more than $5,000 in 2010 (and made all your required estimated tax payments) then you will be not be penalized. You paid 90% or more of your actual current year liability – If you owed $50,0 and you made payments throughout the year that amounted to at least $45,000, then you’re penalty safe.ģ. However, if you owe this year you will incur an underpayment penalty if you underpay your taxes in the following year (i.e. You did not have a tax liability in 2010 – If you did not owe taxes a year ago, you will not be penalized for underpayment this year. There has been no change in the safe harbors for Estimated Payment of Individual Income Tax for tax year 2011.ġ. ![]()
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