Do you have former employees who have left small balances in your company’s retirement plan? If so, you are not alone. Employers are often faced with the burden of having to maintain account balances in their company’s retirement plan for missing or non-responsive participants, either because the ex-employee has moved, forgotten about it, or passed away. Whatever the reason, it creates a number of ongoing issues for employers:
Ongoing fiduciary responsibility
Increased recordkeeping and administration costs
Plan audits if the participant count climbs above 100
Continued DOL disclosures
Continued participant mailings of notices, summary annual reports, etc.
In recognition of these issues faced by employers, the federal government issued regulations that provide employers with a simple and cost effective solution. The solution? Employers are allowed to implement an automatic IRA rollover program for missing or nonresponsive ex-employees.
For information regarding Colorado National Bank’s (CNB’s) Automatic Rollover IRA Program, click here.
Did you receive a letter from us alerting you that your funds, from your previous employer’s retirement plan, have been rolled over into an IRA?
If you received IRA paperwork from us, your former employer (in accordance with the provisions of the company’s retirement plan document and applicable government regulations) has established a self-directed Automatic Rollover IRA on your behalf with Colorado National Bank. This is allowed in situations where former employees fail to complete and return a company’s distribution election form and the company’s effort to locate the missing employee proves unsuccessful. For more Participant Information click here.
TPAs / Record Keepers
At Colorado National Bank we understand the important role that TPAs and Record Keepers fulfill with their clients. Our Automatic Rollover IRA Program was built with you in mind. CNB pays TPAs / Record Keepers referral fees each year as long as the missing or nonresponsive participant’s IRA is administered by CNB (subject to certain terms and conditions). For more Referral Program information click here.