PACE will timely review and request all proper information to confirm a participant’s eligibility for a withdrawal or loan from the plan.
It is important to follow a consistent protocol and maintain appropriate records and proof for any distribution or loan due to financial hardship and abide by the IRS financial hardship guidelines.
A Required Minimum Distribution (RMD) can be difficult for a plan sponsor to monitor and track once an employee has retired. Some active employees have the option to postpone the RMD until the year in which he/she retires while owners are exempt from this forgiveness.
Failure to process an RMD carries an excise penalty up to 50% of the RMD amount.
Send distribution forms to participants
Review distribution forms
Review distribution requests
Review and approve or deny distribution claims:
If approved, process the distribution
If denied, notify participant and assist with any appeal
Review request for adequate hardship
Notify payroll provider to suspend deferrals
Notify participant when they are allowed to resume deferrals
Remit tax withholding payments
Send Forms 1099-R to participants and the IRS
Notify participant, or beneficiary, of required distribution and provide election form and process distribution or rollover
Authorize the use of forfeitures of non-vested account balance
Authorize the use of forfeitures as permitted by the Plan
Maintain copies of all distribution paperwork
Assist participants with distribution requests
Send loan paperwork to participants
Review loan request
Approve or deny loan requests
Send loan documents and amortization schedule to participants
Review and Maintain signed copies of loan documents
Review and approve or deny loan repayment suspension for a leave of absence
Decide if/when a loan default occurs
Notify participant of default and tax implications
Send tax forms for a loan default