New 401(k) rule published

The U. S. Department of Labor has published an interim final rule requiring the distribution of 401(k) type benefits for missing non-spouse beneficiaries from terminated plans to be rolled into individual retirement accounts.

The rule provides plan fiduciaries of terminated plans and qualified termination administrators (QTAs) of abandoned plans with a fiduciary safe harbor for making distributions on behalf of participants or beneficiaries who fail to make an election regarding a form of benefit distribution, commonly referred to as missing participants or beneficiaries.

The rule also establishes a procedure for financial institutions holding the assets of an abandoned individual account plan to terminate the plan and distribute benefits to the plan's participants or beneficiaries, with limited liability.

The regulation also contains model notices for notifying participants or beneficiaries of the plan's termination and distribution options.

Source: HR.Blr.com