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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76422  
Subject: Re: 401k min-balance to prevent forced distrubut Date: 9/16/1997 3:13 PM
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Greetings, ScurvyDog, and welcome.

<<I have a 401k account that was supposed to become a
permanent account (company is forced to maintain account by federal law) at $3500.

A while back in the WSJ they were saying this would go up to
$5000. Is this true for accounts that pre-date the new law or will these accounts under the new min become un-permanent.

Also, does anyone no when this is supposed to happen. Any
details would be appreciated.>>

The Taxpayer Rekief Act recently signed into law raises that limit to $5,000 effective with plan years beginning after enactment. In most cases, that means in 1998 retirement plans may force a distribution to terminated partcipants if their
accumulated benefit under the plan is $5K or less. Those forced to take a distribution may transfer those amounts to an IRA to delay taxation until retirement. The law is silent on "grandfathering," so my educated guess is if your balance is under $5K when your old plan's new plan year starts (probably after 1/1/98), then you will receive a forced distribution.

Regards........Pixy
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