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- What is a Missing Participant?
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- What Regulations Apply to Missing Participants?
- Sources of Uncertainty for Plan Sponsors
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What Regulations Apply to Missing Participants?
Across the financial services industry, there are multiple regulations that deal with the problem of missing participants.
- DOL FAB 2014-01: This guidance was issued in conjunction with the obligation of plan fiduciaries to search for lost and missing participants upon termination of a defined contribution plan.
- DOL Best Practices for Pension Plans: Describes a range of best practices fiduciaries of retirement plans, such as 401(k) plans, should consider as steps their plan could take to help reduce missing participant issues and ensure that plan participants receive promised benefits when they reach retirement age.
- DOL Compliance Assistance Release 2021-01: Outlines the general investigative approach that will guide all of EBSA’s Regional Offices under the Terminated Vested Participants Project and facilitate voluntary compliance efforts by plan fiduciaries.
- DOL Field Assistance Bulletin 2021-01: Authorizes, as a matter of enforcement policy, plan fiduciaries of terminating defined contribution plans use of the PBGC missing participant program for missing or nonresponsive participant’s account balances.
- IRS Rev Proc. 2015-27: The corrective procedures update guidance in light of the SSA terminating the SSA letter forwarding service.
- IRS Field Directive regarding Lost and Missing Participants and RMDs (10/19/17): This guidance directs IRS examiners not to challenge a qualified plan as failing to satisfy the RMD standards under the Code provided that the plan takes the appropriate steps in seeking to locate the participant.
- PBGC Guidance - 82 Fed. Reg. 60,800 – in conjunction with PBGC expansion of PBGC missing participant program. The regulation requires that plan administrators conduct a diligent search as a prerequisite to participating in the program.
- SEC Rule 17 CFR § 240.17Ad-17 – The regulation describes search efforts that must be conducted by transfer agents and broker-dealers who maintain accounts of lost or missing accountholders.
- National Council of Insurance Legislators Model Law. The Model law was enacted to ensure the timely payment of death benefits to beneficiaries.
- OCC website: Each state has an unclaimed property program. Before sending the account balance to the state, the bank is usually required to try to contact the customer. Some banks publish the names of the account holder in a local newspaper. Some banks send a letter to the last known address of the account holder. The bank will turn over the account balance to the state if there is no contact from the account holder.
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