Compliance April 17, 2014

SSA Letter-Forwarding to Be Discontinued

April 17, 2014 (PLANSPONSOR.com) – The Social Security Administration (SSA) announced it will discontinue its letter-forwarding program.
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Since 1945, the agency has provided the service to help third-parties find “missing” individuals in order to communicate monetary or humanitarian information. The SSA will stop the letter-forwarding service on or around May 17.

The agency explains that since the Internet now offers numerous locator solutions through free social media websites and for-pay locator service providers, the public can now reliably locate people without the agency’s forwarding service. The agency also noted the letter-forwarding service is not a program-related activity under the Social Security Act.

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The Internal Revenue Service discontinued its own letter-forwarding service in August 2012 for similar reasons (see “IRS Stops Forwarding Letters for Missing Participants”).

For more information, contact Esset Tate by mail at the Office of Public Service and Operations Support, Social Security Administration, 6401 Security Boulevard, Baltimore, Maryland 21235-6401, or by phone at 410-966-8502.

The announcement from the SSA is here.

Reader Responses April 17, 2014

SURVEY SAYS: Does your plan distribute small plan balances using a safe harbor IRA?

April 17, 2014 (PLANSPONSOR.com) - Participant mobility and the increasing use of automatic enrollment in retirement plans, may result in many small balances in different plans.
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For plan sponsors, this could be an administrative and cost concern.  Regulations have been enacted allowing plans to roll over small account balances to an individual retirement account (IRA). The safe harbor IRA law now requires that if a plan adopts mandatory distributions of balances less than $5,000, retirement plan mandatory distributions of $1,000 to $5,000 must be automatically rolled into an IRA instead of being paid out in cash, unless the participant elects otherwise.  

There isn’t much information available about adoption of a mandatory distribution policy and usage of safe harbor IRAs, so we’d like to get your opinions.

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This week, I’d like to know, do you have a small balance in a prior employer’s plan, or has it been automatically rolled over for you? Does your current firm automatically roll over small plan balances? Why or why not?

You may respond to this week’s survey by 6 p.m. Pacific time today at https://www.research.net/s/JD6VZ59.

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