The Department of Labor has recently begun putting pressure on pension plan administrators to locate any ‘missing’ participants, or terminated and fully vested participants, who haven’t received any kind of payout from the plan. There are plenty of reasons a former employee may have left money in your plan and maybe you’ve even tried contacting them in the past to no avail. However, the DOL now says you have a duty to find these missing participants in advance of their benefit start date and has begun auditing plans with too many of these participants.
How can I find missing participants?
Going forward, you should do your best to maintain records of current employees’ information. This includes phone numbers and personal emails. Update these records yearly and make sure it’s updated at the time they leave the company. People often move, but they don’t often change their email or phone number. Additionally, be sure employees are aware they even have a pension account with you – especially if they aren’t taking the lump sum option. Often times with automatic enrollment many employees aren’t even aware that they have such an account. Younger employees are more prone to this and if they don’t know they can’t cash out. Ideally you’d communicate this throughout their duration of service but a reminder at termination never hurts.
However that doesn’t help you much with locating past employees. There are a few minimum steps you can take to satisfy your fiduciary responsibility.
- Send a notice using certified mail – an easy first step to determining if they still reside at the address you have on record
- Check ALL the records in any related plans – check things like any healthcare plans they participated in, any HR forms or other retirement plans
- Reach out to the designated beneficiary – there is a good chance the beneficiary is still in contact with the participant or knows how to get in contact
- Use free electronic search tools – your plan provider likely offers some
What if I still can’t find someone?
There are further steps to take such as a paid search, but most importantly, you must document all of these steps you’ve taken to locate the participant. If you’re looking to move these assets out of your plan for any number of reasons (termination, decreasing your participant fees, etc.) it’s still possible even without locating the missing participant.
However, before doing anything be sure to talk to your plan administrator. You don’t want the Department of Labor to decide you’ve breached your fiduciary duty. A proactive approach to this problem is the way to go.
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