Sources of Uncertainty for Plan Sponsors

For plan sponsors, there is significant uncertainty over how best to address the problem of missing participants.
Plan sponsors are confronted with:
  • Lack of Guidance: The most recent guidance from the Department of Labor in January 2021, while very helpful in identifying a range of best practices, does not establish "bright line" rules that plan sponsors can follow.
  • Inconsistent Enforcement Positions: Plan sponsors claim to receive inconsistent enforcement actions during audits, including extreme requirements to “keep searching every year, indefinitely” and to “do whatever it takes” including contacting former co-workers and family, or to notify participants of audit actions.
  • Fiduciary Risk: Failure to locate missing participants can result in increased penalties, risk of plan audits and potentially – a breach of fiduciary duty.
The American Benefits Council clearly outlined the concerns of plan sponsors in an October 2017 letter to the Department of Labor.

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