Seyfarth Synopsis: The IRS recently issued
somewhat helpful guidance to plan administrators on what to do
about the constant problem of uncashed benefit checks from
qualified retirement plans. The initial excitement upon hearing the
news, however, was quickly met with disappointment as the
realization set in that the guidance was limited.
For more background on this IRS Revenue Ruling, click on our
client alert. For now, suffice it to say that the guidance
applied narrowly to benefit checks that are required to be issued
to participants. So, for example, a small amount cash-out check
issued following termination of employment, or a check issued to a
participant who made a distribution election. In these situations,
the IRS advises that the participant's failure to cash the
distribution check does not affect the employer's obligation to
withhold and report taxes under the assumption that the participant
had control of the check but for one reason or another
