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IRS Memo Addresses Required Minimum Distributions to Missing Participants

The IRS recently released a memo instructing its Employee Plans examiners not to challenge a qualified retirement plan’s compliance with the required minimum distribution (“RMD”) rules under Code Section 401(a)(9), in situations where the plan is unable to make an RMD to a missing participant after completing the following steps: (i) searching plan, sponsor, and publicly-available records for alternative contact information; (ii) using a commercial locator service, credit reporting agency, or proprietary Internet search tool; and (iii) attempting contact via certified mail to the last known mailing address and through “appropriate means” for any other addresses or contact information (e.g., email addresses or telephone numbers). If a plan has not taken all of the foregoing steps, an examiner may challenge the qualified status of that plan if it fails to make timely RMDs to lost participants. Plan administrators are thus advised to complete those steps and document the results for any missing participants who have forthcoming or past due RMDs under a qualified plan.

View a copy of the IRS memo.

The lawyers of our Employee Benefits and Executive Compensation Practice Group are readily able to assist companies on a nationwide basis with implementing sophisticated benefit plans and providing answers to their most challenging compensation issues. Additionally, our lawyers are well aware of the daily employee benefits challenges facing companies of all sizes and are capable of helping in-house lawyers and human resources personnel with the day-to-day advice and guidance necessary to properly administer employee benefits plans.

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