The Department of Labor's ERISA Advisory Council intends to recommend that the department update current guidance related to locating lost or missing retirement plan participants, based on teleconference discussions held by the panel Sept. 23.
The council intends to suggest that the DOL update FieldAssistance Bulletin 2004-02 to clarify that it applies to locating missing plan beneficiaries, and not just plan participants, in terminated defined contribution plans. The council would also like the DOL to specify plan fiduciary obligations of plan sponsors in attempting to locate missing and nonresponsive plan participants in active and frozen defined contribution plans.
The council also intends to recommend to the DOL that a plan sponsor that has met its fiduciary obligations to contact a plan participant be allowed to treat that individual as a lost participant or beneficiary after a specified period in which the individual fails to cash a retirement benefit check. In that situation, the council intends to recommend, the plan should be allowed to return the distributed amount of the uncashed check to the plan's forfeiture account and determine whether benefits, without earnings, will be restored if or when the participant or beneficiary claims the benefit.
Locating lost and missing plan participants was one of three issues on which the council heard testimony this year. In addition to that issue, the council has also examined the issues of private-sector pension plan de-risking and successful retirement plan communications for various population segments. The council meets several times a year to discuss selected topics and make recommendations with regard to those issues to the labor secretary.
The council plans to hold an open meeting Nov. 4-5 to finalize its recommendations.
On the topic of pension de-risking, the council is expected to suggest that the DOL confirm that Interpretive Bulletin 95-1, which establishes fiduciary standards for the selection of an annuity provider with respect to defined benefit plan benefits, applies also to annuity purchases that are not in connection with a plan termination. The DOL should also consider creating additional safe harbors for plan sponsors making such purchases, including requirements for notice and valuation procedures similar to those required if offered under the plan regarding lump-sum options, the council said.
The council also expects to recommend that the DOL should consider providing guidance under ERISA Section 502(a)(9) to clarify for plan fiduciaries the consequences of a breach of fiduciary duty in connection with the purchase of an annuity contract from an insurer for the distribution of benefits under the plan.
The council is also expected to suggest that the DOL refer the council's final recommendations to the Internal Revenue Service so that the IRS may consider whether to issue guidance on the potential tax implications for the plan and/or the participant of the choice of a lump-sum distribution if the participant is in pay status.
Excerpted from a story that ran in Pension & Benefits Daily (9/24/2013).
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)