The best method of preserving retirement funds for missing participants is to roll the funds into individual retirement accounts, the Department of Labor said in Field Assistance Bulletin 2014-01.
But fiduciaries of terminated defined contribution plans must first take all reasonable steps necessary to track down the missing participants, the DOL said in the bulletin, issued Aug. 14.
Routine methods of delivering notice to participants, such as first class mail or electronic notification, will be adequate in most cases, the DOL said. If the participant doesn't respond with the information necessary for the distribution, or the plan fiduciary reasonably believes that a participant hasn't informed the plan of a new address, the fiduciary must take additional steps to locate the participant or a beneficiary, the DOL said.
“Some search steps involve so little cost and such high potential for success that a fiduciary should always take them before abandoning efforts to find a missing participant, regardless of the size of the participant's account balance,” the DOL said.
Failure to take these steps would result in a breach of the Employee Retirement Income Security Act's fiduciary standards, the DOL said.
Finding Missing Participants
At a minimum, a fiduciary should take the following steps, in no particular order, to locate a missing participant:
• use certified mail,
• check related plan and employer records,
• check with the participant's designated beneficiary, and
• use free electronic search tools.
Excerpted from a story that ran in Pension & Benefits Daily (8/19/2014).
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