Uniglobal can help you and your organization prepare for what's next.
A: No. The plan sponsor has the discretion of whether to permit CRDs from the plan or not.
If permitted, the CRD form will facilitate both the self-certification by the participant confirming that he or she meets the definition of a qualified individual and the processing of the distribution.
A: Yes. However, distribution restrictions to defined benefits still apply. If permitted by the defined benefit plan, a participant would have to not only be a qualified individual, but also have either terminated employment or attained age 59 1/2 to be eligible to receive a CRD.
A: Yes, eventually. The deadline to amend plan documents to permit CRDs is the last day of the plan year beginning after December 31, 2021 (i.e., December 31, 2022 for calendar year plans). Plans can permit CRDs prior to the document being amended. Uniglobal will likely be providing formal amendments sometime in 2021. However, Sponsors should alert Uniglobal to their election here.
A: The eventual amendment for CRDs will add language to just the base document language. Therefore, no plan sponsor election or signature is required of Uniglobal clients. The amendment will not mandate CRDs. The discretion to permit CRDs remains an administrative election for the plan sponsor. Sponsors should alert Uniglobal to their election here.
A: Preparations for a termination amendment are currently underway for any plans terminating prior to the law change amendment deadline.
A: The decision to permit CRDs will be an administrative election. We are providing an SMM to facilitate communicating that election to participants if the plan sponsor chooses to permit CRDs. The SMM is not required to be distributed, but may be used at the plan sponsor’s discretion.
A: We recommend finding the W-4P on the IRS website.