Rolling Out Balances
‍

Today we'll be discussing the critical subject of effectively managing the balances of former employees. For plan sponsors, promoting the rollover of balances less than $5,000 to an IRA is important, and this can be done through the IRS safe harbor. The standard procedure for this involves sending a 30-day notice to the former employees. If no action is taken within that period, the plan sponsor can initiate the automatic transfer.

For balances over $5,000, it's helpful to engage in direct persuasion and maintain ongoing communication. This not only encourages former employees to transfer these assets but also minimizes the risk of them becoming missing participants. Furthermore, hiring a financial advisor can provide customized solutions for former employees, particularly for those who do not already have an advisor. Utilizing a combination of the IRS safe harbor and these personalized strategies can effectively reduce the number of accounts held by former employees.

For more details on how to keep your retirement plan compliant, feel free to contact us. Thank you for watching, and have a great day.

‍