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Compliance February 15, 2007
DoL Announces New Rule for Distributions to Missing Non-Spouse Beneficiaries
February 15, 2007 (PLANSPONSOR.com) - The U. S.
Department of Labor (DOL) has announced 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 (IRAs).
Reported by Nevin E. Adams
The Pension Protection Act (PPA) amended the Internal Revenue Code to allow the rollover of certain retirement benefits of a deceased participant into a tax-favored inherited IRA created on behalf of a non-spouse beneficiary. The new rule, and a related proposed class exemption, conforms to the PPA by amending existing distribution requirements for terminated defined contribution plans, including abandoned plans, to require rollovers into inherited IRAs for missing non-spouse beneficiaries, according to a DoL press release.
“Our rule ensures workers’ beneficiaries won’t suffer a tax penalty when a retirement plan is terminated,” said Acting Assistant Secretary of Labor Bradford P. Campbell.
While the rule will be effective 30 days after publication in the Federal Register, the public is invited to submit written comments on both the interim final rule and the proposed exemption. The regulations and proposed class exemption are to be published in the Feb. 15, 2007 Federal Register .
Comments
Public comments on the rule may be mailed to:
The Office of Regulations and Interpretations, Employee Benefits Security Administration, Room N5669, U. S. Department of Labor, 200 Constitution Ave., N.W., Washington, D.C. 20210, Attention: Amendments to Distribution Safe Harbor and Abandoned Plans Regulation for Missing Nonspouse Beneficiaries.
Comments may also be submitted by email to e-ORI@dol.gov or through the federal e-rulemaking portal at http://www.regulations.gov/ .
Comments on the exemption may be mailed to the Office of Exemption Determinations in Room N5700, Attention: PTE 2006-06 Amendment, by email to e-OED@dol.gov or through the federal e-rulemaking Web site portal.