The RCH program portability services mentioned in the request involve automatic rollovers of mandatory distributions and account balances from terminated workers’ defined contribution (DC) plans into default individual retirement accounts (IRAs), and the subsequent automatic roll-in of funds in the default IRA to an individual account plan
maintained by a new employer when the IRA owner changes jobs.
In general, the administrator of an individual account plan
is required to provide 30 days advance notice to participants and beneficiaries whose rights under the plan will be temporarily suspended, limited or restricted by a blackout period.
(A profit sharing plan may not invest more than 10 percent of its holdings in employer stock unless it meets the requirements for an "individual account plan
.") Separate accounts are established for each participant and allocation of contributions and distributions of benefits are generally subject to the same requirements as a profit sharing plan.
A QTA may find that an individual account plan
has been abandoned if there have been no contributions for more than 12 continuous months or where the facts and circumstances known to the QTA indicate that the plan is, or may become, abandoned.
An eligible individual account plan
(i.e., a profit-sharing, stock-bonus, or employee stockownership plan that specifically permits the holding of "employer real property" or "qualifying employer securities") may hold such property in any amount--and may even hold such property as the exclusive assets of the plan.
While any individual account plan
can offer a variety of choices regarding contributions, investments, and withdrawals, the choice of whether or not to participate is fundamental to a voluntary approach.
District Court for the Southern District of Texas in 2001 is a 401(k) plan, an individual account plan
, called the "savings plan." The savings plan permitted the employees to contribute between 1 and 15% of their base pay, and Enron matched their contributions at certain percentage levels with Enron stock.
The share of lost benefits recoverable by workers under the individual account plan
depends on several factors, the most important of which is the rate of return.
This applies to any defined benefit plan or individual account plan
subject to minimum funding standards.
Here there is no question of forfeiture, but if the account is part of an individual account plan
and not used up by the end of the year, it must be allocated to participants' accounts in accordance with Internal Revenue Service (IRS) rules that prohibit unallocated funds.
To be qualified as "an ERISA section 404(c) plan" under the regulations, the plan must be an individual account plan
in which the participant both (1) has an opportunity to exercise control of the assets in his individual account and (2) chooses from a broad range of investments.(13)
Bradford Campbell, counsel at Drinker Biddle & Reath LLP's Employee Benefits & Executive Compensation Practice Group and former assistant secretary of labor for the Employee Benefits Security Administration (EBSA), says he is still concerned about one sentence in the revised FAB, which reads: "Nonetheless, in the case of a 401(k) or other individual account plan
covered under the regulation, a plan fiduciary's failure to designate investment alternatives, for example, to avoid investment disclosures under the regulation, raises questions under ERISA Section 404(a)'s general statutory fiduciary duties of prudence and loyalty."