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- What is a Missing Participant?
- Why Plan Sponsors Should be Concerned
- What Causes Missing Participants?
- The Magnitude of the Problem
- What Regulations Apply to Missing Participants?
- Sources of Uncertainty for Plan Sponsors
- Best Practices for Finding Missing Participants
- What to Look For in a Search Service
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The Magnitude of the Missing Participant Problem
A March 2018 survey by Boston Research Technologies revealed that 11.3% of separated, defined contribution account records have a stale address. Based on the number of separated participants in defined contribution plans, this suggests that there are, at minimum, approximately 3 million missing participant accounts. This number continues to grow as participants change jobs and relocate, leaving their retirement savings behind.
Other key findings from the Missing Participant Survey:
- 1 of 5: Re-locations will result in a missing participant
- One-third: Participants learn of a retirement account with a previous employer they did not realize they had
- 60%: Participants who prefer an automated process to update address or consolidate accounts
- 23%: Would utilize a lost & found database to locate a stranded account
- 9%: Participants who would not verify their address if asked by a former employer
Now, new research published by RCH in January 2021 suggests that there could be an even larger problem with stale addresses for terminated participants with no obvious "red flags" (ex. - returned mail). For participants whose addresses were previously believed to be "good" -- the study revealed twice the incidence of stale addresses than were expected.
NEXT TOPIC: What Regulations Apply to Missing Participants?
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