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- The Missing Participant Problem
- 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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- Terminating 401(k) Plans
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What Should Plan Sponsors Look for in a Terminating Plan Service Provider?
#1 – Deliver a full range of services including:
- Mailing of required participant notices
- Participant address verification
- Multi-lingual call center support for responding participants
- Safe Harbor IRAs for unresponsive participants
#2 – Have expertise in locating missing participants
The DOL is very specific about what is required if a participant is deemed to be “missing”. When selecting an outsourced provider make sure they have a proven track record of fulfilling those requirements including:
- Verification of/updates to participants’ last best-known address
- Locating beneficiaries of deceased participants
- Utilization of multiple web-based resources
- Oversight of USPS Certified mailing
#3 – Focus on minimizing cash outs and promoting account consolidation
Unfortunately, many participants will be tempted to cash out their retirement savings during a plan termination.
To help reduce cash outs and increase retirement account consolidation to an existing account, like a new employer’s plan, make sure the provider has professionals who will provide distribution counseling.
#4 – Offer fiduciary-friendly Safe Harbor IRAs and on-going account support
- Continuous efforts made to locate missing account holders
- Straightforward, easy-to-understand fee structure
- Monthly account maintenance fee vs. annual fee
- No lock-up provisions
- Ability to move assets to more suitable investment options
- Account consolidation service
#5 – Have a proven track record in facilitating plan terminations:
- How long they’ve handled terminating plans
- The number of terminating plans they’ve worked with
- The mix of large vs. small plans
Working with the right plan termination service provider can alleviate a lot of headaches and save a lot of time. To learn more about the plan termination services of RCH call 1-866-827-9608 or email firstname.lastname@example.org.
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