PenChecks Abandoned Retirement Plans Solutions
Retirement plans that have been abandoned present unique asset distribution challenges for third-party administrators (TPAs), plan participants and custodians:
PenChecks Trust Company of America can help. We provide simple, cost-effective abandoned plan solutions that help you properly terminate abandoned plans while appropriately managing the funds. By outsourcing the process from beginning to end, we help you remain in compliance while upholding your fiduciary responsibility to plan participants.
How To Properly Terminate Abandoned Plans
Terminating abandoned plans involves a complex, highly regulated process. As part of our abandoned retirement plan solutions, PenChecks Trust Company of America (PTCA) offers two abandoned plan program options. We can serve as the successor-directed trustee for your plan. Or we can partner with you to perform compliant back-office abandoned plan termination services.
To ensure that you comply with all Department of Labor (DOL) abandoned retirement plan termination requirements, PenChecks can also apply to be a qualified termination administrator (QTA) for your plan. Once appointed, we take all necessary steps to wind down the plan according to DOL and QTA requirements.
Our complete abandoned plan solution includes the following services:
- Performing address searches to locate participants
- Notifying participants of pending distributions by providing the IRS 402(f) notice
- Collecting participant benefit elections via electronic or paper forms
- Distributing funds to participants (rollover or lump sum) via check, wire, ACH or debit card
- Withholding and remitting all necessary federal and state taxes, and filing all required tax forms
As part of this proven process to terminate abandoned plans, we also establish missing participant IRAs for non-responsive participants, and register missing participants with the National Registry of Unclaimed Retirement Benefits.
Where appropriate, PenChecks also seeks to engage and compensate the plan’s former TPA for work associated with the QTA process, with the fees being payable from plan assets.