If a plan currently has their involuntary distribution threshold set at $1,000 cash out (no automatic IRA for amounts from $1,000 - $5,000), can the plan be amended to have involuntary IRA rollovers if the amounts are between $1,000 - $5,000? Are there any protected benefit rules that are applicable?

Thanks

As I see it you are adding a benefit (i.e. the ability to take a lump sum between 1,000 and 5,000). I don't think that adding or increasing a involuntary distribution threshold takes away a protected benefit.

The anti-cutback regs consider an amendment to provide for a permissible involuntary distribution NOT to be a cutback. (Treas. Reg. Section 411(d)-4, Q&A-2(b)(v).) So, raising the involuntary threshold to $5,000--which brings into play the required automatic rollover between $1,000 & $5,000--would not be a cutback.