What obligation is imposed on the plan sponsor to notify terminated vested individuals that they are entitled to a distribution from the plan? I realize that the overriding 70 1/2 distribution rules are out there, but what is the plan sponsor's obligation to an individual prior to turning age 70 1/2 but after the individual has terminated to inform him/her of the benefit due him/her and the availability to receive a distribution of such amount?

Thanks,

I have seen local government plans that imposed the requirement on the participant that he notify the plan administrator of his termination, but never in a non-government plan.

Code section 6057 requires a plans to provide a notice of deferred vested benefit in the year of termination, when the plan holds an undistributed.

Code section 401(a) requires a non-government, non-church plan to provide:
Unless the participant elects otherwise, distribution of benefits shall begin no later than the 60th day after the latest of the close of the plan year in which:
(1) The participant attains age 65 (or the plan’s normal retirement age, if earlier);
(2) Occurs the 10th anniversary of the year in which the participant commenced participation in the plan; or
(3) The participant terminates service with the employer, (i.e. late retirement).

During this time the 417 rules treat the benefit as being immediately distributable.

There may be an exception for multiemployer plans, but I read all this to mean that the Plan Administrator has an affirmative duty to make the distribution available by attempting to contact the participant.

ERISA section 105©.