By Mike Wilder | August 19, 2015

Whenever I am meeting with a plan sponsor, TPA or recordkeeper for the first time, I ask about returned mail related to missing participants; and almost every time I get…“the look”. The look and/or eye roll that instantly says that returned mail is definitely a problem. The entire retirement industry is all-too-familiar with returned mail related to missing participants. In addition to the money wasted on materials and mailing costs, missing participants create administrative burdens and increase the plan’s fiduciary liability risk. So, what’s a fiduciary to do?

Be proactive
Issue reminders to participants asking them to review and/or update their address on file. According to the US Census Bureau, 12% of Americans moved each year from 2008-2014; and let’s be honest, the retirement plan provider is usually way at the bottom of the priority list regarding an address change notification. Some ways to be proactive include:

  • Emailing participants asking them to verify/update their address on file at least annually
  • Adding a message on the participants’ quarterly statement
  • Requiring participants to click through an address verification “popup” after logging in to their benefits site

Consider an automatic rollover program

For plan sponsors, an on-going automatic rollover program will not only eliminate all missing terminated participants under $5,000, it may also help reduce plan administration costs by transferring these participants’ balances to a safe harbor IRA. The total number of plan participants and average account balances are often used as pricing metrics for plans, so if the participant numbers of small balance accounts go down, the average balance goes up, which may lead to administrative cost savings.

Go outside for help
It’s pretty unlikely that benefit professionals will want to develop an extensive participant search program in-house. Fortunately, there are plenty of companies ready to assist. If you do decide to work with an outsourced provider of missing participant search services make sure to ask:
  • What sources do they use to locate & verify the data?
  • Do they offer electronic searches plus standard & certified mail capabilities?
  • Do they offer a multi-lingual call center to assist participants with updating addresses? If so, how many representatives do they have?
  • Do they offer results reporting?
  • Do they offer a complete audit trail of all communications with participants?
  • Are their processes SOC 2 Type 2 certified?
  • Do they offer an in-house automatic rollover program?

Missing participants are not a new problem, but there are some inexpensive solutions available to reducing the number in your plan. Good luck, and I hope if we ever meet you won’t have…”the look”.

For more information, contact RCH at (866) 827-9608, e-mail us at, or download any of our services brochures.