How to account for terminated employee balances, force-outs, etc.
As outlined in your contract, Vestwell relies on you for data about your employees.
Please update your census immediately upon the termination or exit of an employee.
In general, if a terminated employee's vested balance is over $5,000 and they choose not to roll out funds, the account will remain active and still be billed accordingly.
If the terminated employee's vested balance is under $5,000, their account balances will be forced out quarterly.
If the terminated employee's vested balance is below certain amounts and the cost of fees (employee distribution fee of $100 ) and withholdings to distribute the funds outweigh the account balance, these accounts are zeroed out.
You are obligated to continue to pay participant fees until the participant's account is at a zero balance.
For more information on Force Out Distributions, please read the article on the participant help center, "What Is a Force Out Distribution?"