03.05.2005 19:11:00
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MetLife Works with Millennium Trust to Launch Automatic Ira Rollover P
Business Editors
NEW YORK--(BUSINESS WIRE)--May 3, 2005--MetLife Retirement Plans, a division of MetLife Retirement & Savings, announced today that the company is working with Millennium Trust Company, LLC to provide its small- and medium-sized 401(k) plan customers with an automatic IRA rollover program. With more than 9,000 client accounts, Millennium Trust is a leading provider of administrative and IRA custody services specializing in large volumes of small IRA accounts. MetLife and Millennium Trust began talks after changes to United States tax law required that if a participant leaves a company with a retirement plan account balance between $1,000 and $5,000, plans can no longer force them to receive cash distributions.
Effective for plan distributions made on or after March 28, 2005, participants now must affirmatively consent to receive a cash distribution if their account balance is between $1,000 and $5,000. Unless the participant makes an election to receive the amount in cash or elects a direct rollover, the balance will automatically be rolled into an individual retirement annuity/account (IRA) established on behalf of the participant by the plan. This allows a plan sponsor to transfer the responsibility for non-responsive participants with small account balances to a qualified IRA provider, lowering their administration costs and saving time and personnel resources while preserving tax deferred retirement savings for former employees. If the automatic rollover process is established in accordance with the Department of Labor's "safe harbor requirements," plan fiduciaries will not have to monitor the IRA provider and will have no responsibility for the IRA provider's compliance with the terms of the IRA agreement after the funds are rolled over.
"MetLife's relationship with Millennium Trust allows small- and medium-sized plan sponsors to implement an automatic IRA rollover program similar to those offered to much larger plans," said Bill Slater, vice president, MetLife Retirement & Savings. "Purchasing on a group basis produces economies of scale - fees are kept low and the rollover process is simple and efficient."
Features of the Millennium Trust Automatic Rollover Program include:
-- | MetLife will coordinate the transfer of participant information and assets from the plan to Millennium Trust; |
-- | Millennium Trust will provide welcome kits to each participant and a dedicated client service group that will process and administer the IRA accounts; and, |
-- | The default investment will be a FDIC insured money market vehicle offering competitive yields. |
MetLife Retirement Plan clients can choose an automatic IRA provider other than Millennium Trust but would not benefit from the coordinated participant information and asset transfer.
If plan sponsors prefer not to establish an automatic rollover program, the new law also provides for an alternative election. According to the "Reduced Threshold" approach, plan sponsors can reduce the cashout threshold to $1,000 but are prohibited from cashing out participants with balances over $1,000 without consent. This increases participant account charges and requires that plan sponsors keep track of terminated participants for annual mailings and file additional Form 5500 information.
About Millennium Trust Company, LLC:
Millennium Trust is an independent trust company and leading provider of administrative and custody services including Traditional, Roth and SEP IRA's for individuals, Solo 401(k)s for self-employed and business owners, integrated Health Savings Accounts for individuals and the group market, and investment platforms for investment advisors. Millennium Trust also provides an Automatic Rollover IRA solution to plan sponsors for "mandatory" small balance distributions. Millennium Trust offers self-directed investment capabilities and access to a wide variety of non-proprietary products including traditional assets such as stocks, bonds and mutual funds, as well as alternative assets. For more information, please visit www.mtrustcompany.com.
About MetLife
MetLife, a subsidiary of MetLife, Inc. (NYSE: MET), is a leading provider of insurance and other financial services to individual and institutional customers. The MetLife companies serve individuals in approximately 13 million households in the U.S. and provide benefits to 37 million employees and family members through their plan sponsors. Outside the U.S., the MetLife companies serve approximately 9 million customers through direct insurance operations in Argentina, Brazil, Chile, China, Hong Kong, India, Indonesia, Mexico, South Korea, Taiwan and Uruguay. For more information about MetLife, please visit the company's Web site at www.metlife.com.
--30--AC/ny*
CONTACT: MetLife, Inc. Toni Griffin, 727-862-7006 tgriffin2@metlife.com
KEYWORD: NEW YORK INDUSTRY KEYWORD: INSURANCE HUMAN RESOURCES BANKING SOURCE: MetLife, Inc.
Copyright Business Wire 2005
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