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Do you have former employees who have 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 concerns 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 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 so, your former employer established a self-directed Automatic Rollover IRA on your behalf with CNB. 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
At Colorado National Bank we understand the important role that service providers, such as TPAs and Record Keepers play in the administration of employer plans. Our Automatic Rollover IRA Program was built with you in mind. CNB offers a compensation program that pays service providers an initial fee plus an annual trailer for each qualified missing participant IRA that you refer to us. For more information about our Automatic Rollover IRA compensation program click here.