To avoid headaches, I just think it’s important to prune former employees from the list of participants with an active balance.
As I always say, a former employee is always going to complain a lot more than a current employee. In addition, you have to keep track of them for notices and make sure they don’t go missing. While you need consent for former employees to receive the distribution in excess of your cashout rule, I think it’s extremely important to hassle them every year about the money they have in the plan and that they can take it out. That is in addition to all the other required notices they have to get.