Upon audit, the IRS will want to see some of these!
There are a variety of distribution events that can occur including termination of the participant, in-service withdrawal, death, disability, retirement, and required minimum distributions after retirement. Depending on the event, a different notice and/or form is required.
The notice timeline requirements are generally characterized as "within a reasonable" period of time around or before the occurrence of the event. This is usually considered to be 30 to 90 days, although the participant can generally waive the minimum 30 day requirement upon early receipt of the notice. Plan sponsors should adopt routine procedures to provide these notices and forms at or near the occurrence of the events to assure that they meet the reasonableness test and do not fail to provide the notices and forms.
Plan sponsors are required to provide proper notice of "eligible rollover options" and an explanation of the tax withholding rules for distribution within a reasonable time frame for terminating participants. This notice is known as a Section 402(f) notice (referring to IRS Code Section 402(f)) and the IRS has provided a "safe-harbor" explanation of what must be included in the notice (Temp Reg paragraph 1.402(c)-2T, Q&A 11(b); IRS notice 92-48, 1992-2 CB 377).
Frequently, an ex-Employee will initiate a request for a distribution from his account by sending to the Plan a Transfer Form provided by a brokerage company or fund company. Plan administrators should not act upon these transfer requests.
An administrator should recognize the submission of the transfer form for what it is: a request for the distribution. The administrator should send to the Participant the Plan's required notices and forms to both insure and document the Plan's adherence to notice requirements.