SURVEY SAYS: Does your plan distribute small plan balances using a safe harbor IRA?

April 17, 2014 ( - Participant mobility and the increasing use of automatic enrollment in retirement plans, may result in many small balances in different plans.

For plan sponsors, this could be an administrative and cost concern.  Regulations have been enacted allowing plans to roll over small account balances to an individual retirement account (IRA). The safe harbor IRA law now requires that if a plan adopts mandatory distributions of balances less than $5,000, retirement plan mandatory distributions of $1,000 to $5,000 must be automatically rolled into an IRA instead of being paid out in cash, unless the participant elects otherwise.  

There isn’t much information available about adoption of a mandatory distribution policy and usage of safe harbor IRAs, so we’d like to get your opinions.

This week, I’d like to know, do you have a small balance in a prior employer’s plan, or has it been automatically rolled over for you? Does your current firm automatically roll over small plan balances? Why or why not?

You may respond to this week’s survey by 6 p.m. Pacific time today at