Finding Missing Participants

Missing plan participants is one of the major issues when people leave employment and the plan sponsor has lost touch with them. After their last day of service, some plan participants fall off the face of the earth. The problem is that as a plan sponsor, they are a fiduciary to the plan and are responsible for the assets belonging to those folks who fall off the face of the earth. It becomes a bigger issue when you factor in the required notices and disclosures that all plan participants are supposed to receive.

In the old days, plan sponsors would have guidance from the Department of Labor (DOL) that said that when it came time to locating missing participants, the plan sponsor could use the Internal Revenue Service letter-forwarding program (since discontinued) that would send mail to these missing participants or use a locating service. Many third party administrators advised clients that they could simply liquidate a missing participant’s account and forward that balance to the Federal government as a100% tax withheld payment.

Guidance 10 years ago eliminated that 100% withholding option especially when the guidance as pushing for the use of Individual Retirement Accounts for these missing participants that a plan sponsor could use to park the missing participants’ money.

Thanks to technology, it’s much easier to find people. Heck, I’ve found so many former classmates on Facebook. So it’s no surprise that the DOL issued more guidance regarding locating participants and one of the suggestions is to Google missing participants.

Some of the suggestions that the DOL had in locating missing participants in Field Assistance Bulletin 2014-01

  1. Use certified mail
  2. Check related plan and employer records
  3. Check with the designated beneficiary that the participant listed on their beneficiary form.
  4. Find them online. The DOL says the plan sponsor should use free Internet search tools, such as Google, public records, obituaries, and social media (Facebook, Twitter, etc).

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