Consolidation Corner

Uncashed Distribution Checks: An Ounce of Prevention is Worth a Pound of Cure

Posted by Thomas Hawkins on Feb 9, 2017 2:17:10 PM

 

Now that we’re in the thick of flu season, we’re reminded of Ben Franklin’s famous axiom: “an ounce of prevention is worth a pound of cure.”  A yearly flu shot is perhaps the best example of an effective, preventative action you can take to minimize your odds of catching the flu, and keep you breathing more easily than those who haven’t.

 

Similarly, retirement plan sponsors can take preventative steps to minimize the incidence of uncashed distribution checks, as well as to resolve the situations that inevitably occur.

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Topics: Uncashed Check Services, Stale Dated Checks, Uncashed Distribution Checks

Five Common Misconceptions About Automatic Rollovers

Posted by Thomas Hawkins on Apr 21, 2016 10:05:22 AM

 

Automatic rollover programs allow plan sponsors to force out of their plan separated participants with balances less than $5,000 into a Safe Harbor IRA.  These programs can be quite effective at helping sponsors resolve many of the problems associated with housing small-balance accounts in-plan, such as: 

  • Higher levels of missing participants
  • Increased administrative costs and workload
  • Higher recordkeeping fees
  • Lower average account balances 

While the benefits are well-known, there are some common misconceptions about automatic rollovers.  To ensure that plan sponsors can adequately fulfill their fiduciary responsibility to participants, we’ve identified the five most important misconceptions that are important for sponsors to understand and avoid.

 

Misconception #1:  It’s best to cash out participants with balances less than $1,000

Often times, plan sponsors believe that they should automatically distribute (cash out) separated participants with balances less than $1,000.  After all, it’s quick & easy, it’s allowed, and those participants would likely have cashed out anyhow.  Right?   Not so fast. 

 

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Topics: Auto Portability, Safe Harbor IRA, Automatic Rollovers, Cash Outs, Leakage, Retirement Plan Portability, Uncashed Check Services, Stale Dated Checks

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