Locating Missing Participants

Person looking for missing participants

At one time or another all plan sponsors will likely be in the position of having to locate missing participants.

This may be related to delivery of regulatory required communications, distributing of assets, or communicating fund changes to active and/or terminated participants. If the delivery of necessary communications is encumbered because a participant cannot be located there exists a fiduciary requirement to perform a “reasonable search” for this “missing” participant. There are various search methods that would be considered as reasonable good faith efforts, including:

  • Certified Mail (with a return receipt) to the last known address;
  • Checking records of other benefit plans (i.e., employer provided health plan); and
  • Using a commercial participant-locating or letter forwarding service (such as unclaimedretirementbenefits.com) (historically the Department of Labor required use of either the IRS or SSA letter forwarding programs, but both of those programs have been discontinued within the past year – it is a reasonable assumption that Labor will want to see use of a commercially reasonable equivalent in the absence of those programs).

In the event that your plan allows cash-out distributions on terminated participants with account balances under $1,000, or rollover to IRA for balances between $1,000 and $5,000, be sure to check the provisions described in the plan document. Typically a rollover to an IRA on behalf of these participants can be accomplished for participants deemed to be missing. For more information on this topic, please contact your plan consultant.

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