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Fiduciary Risk Alert: Missing Plan Participants – DOL Offers Long-Awaited Guidance

Posted by Brian Dunfee on Jan 22, 2021 1:26:39 PM

Puzzle with missing piece in green color

The fiduciary obligations levied on plan sponsors under Title I of ERISA can be somewhat murky especially when it comes to locating (and distributing vested retirement benefits to) missing and/or non-responsive participants.  Furthermore, the Department of Labor (DOL) has indicated missing participants as one of its priority enforcement initiatives for the upcoming year. 

On January 12, 2021, the DOL issued a three-part guidance release to help plan sponsors better navigate these tricky fiduciary obligations.

    1. Missing Participants – Best Practices for Pension Plans
      This portion of the guidance release addresses best practices for plan sponsors to consider when attempting to find missing participants including, but not limited to, the following:
        • Records of Related Plans and Employers
          • Documentation for other employer-sponsored plans such as group health plans can be a good source of more up-to-date information since these benefits might have been more recently accessed.  Inquiring of these plan administrators can sometimes lead to a more recent address.
        • Designated Beneficiaries
          • Fiduciaries must try to identify and make contact with any person that the missing participant has designated as a beneficiary.  These individuals may be more readily available and can be a good source of contact information.
        • Electronic Search Tools
          • There are a variety of online tools at a plan sponsor’s disposal that are free of charge than can be helpful.  These include traditional Internet search engines, public record databases, and social media resources.
    1. Compliance Assistance Release 2021-01

      This document outlines the general approach that the Employee Benefits Security Administration (EBSA) of the DOL uses to guide their regional offices in enforcement efforts.  Of particular value is a description of the various pieces of information that EBSA staff typically request and what errors they are looking for.

    2. Field Assistance Bulletin 2021-01
      This document specifically speaks to sponsors of DC plans which are being terminated.  The Pension Benefit Guaranty Corporation (PBGC) can be used as part of a missing participant location program.  The guidance details which participant accounts may be transferred to PBGC and the rules of notifying participants of such transfer.

The documents referred to above can be located on the DOL’s website via the links below:

      1. Missing Participants - Best Practices for Pension Plans
      2. Compliance Assistance Release 2021-01
      3. Field Assistance Bulletin 2021-01

Please contact us if you have further questions regarding plan termination or your options regarding missing participants.

Topics: Accounting & Auditing, Benefit Plan Advising & Auditing, Accounting and Tax Resource

Brian Dunfee

Brian Dunfee

Brian Dunfee is a Director in Meaden & Moore’s Assurance Services Group. With 19 years in public practice, Brian has extensive audit experience, especially in the field of employee benefit plan audits. He has a strong understanding of the operations and compliance of many types of employee benefit plans, which he developed through planning, preparing, and supervising those audit engagements.