We recently acquired a company in a stock (not cash) transaction. Our company has a 401(K) plan. The acquired company 401(k) plan was terminated prior to the deal. We received an FDL on the acquired company plan termination and began distributions. We can not locate 50 or so participants from the terminated plan even after sending certified letters, IRS locator service, etc. (everything required in FAB 2004-02).

Question: Can we distribute these "lost participant" balances to IRA's (as described by the Bulletin) even tho we have another on-going defined contribution plan to which these balances could be transferred ? None of the guidance seems to contemplate having two DC plans and one being terminated.

Thoughts ? Thanks.

Hi,
Did you ever figure out what to do in this situation? I'm faced with an almost identical fact pattern. Ideally they would like to rollover these accounts to the Co's existing 401(k) plan. However, my reading of the 411 regs and the 404(a) regs under ERISA seem to indicate that they only have safe harbor protection if they rollover into an IRA.

Any thoughts are much appreciated! Thanks

Wouldn't you prefer to have them in IRAs now and be done with those people? It's not going to get any easier to find them as time passes.

I hate to make the blatant ad post, but I do work for a company that specializes in death audits and missing participant/address location services. I'm happy to discuss our program with you (and it is the most inexpensive yet quality driven service in the industry).

Todd Lokken
Small World Solutions
www.smworldsolutions.com
661.322.6400 x108

Just so poor Todd does not get into trouble - there are other services that advertise on the main Benefitslink home page.
Also note that the fees involved in finding the participants is payable by the plan assets.