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On January 12, 2021, the Department of Labor (DOL) issued a 3-part set of missing participant guidance for employer-sponsored retirement plans, addressing a variety of issues:
Best practices for reducing missing participant populations;
Explanation of the DOL’s goals and process in missing participant audits under the Terminated Vested Participant Project; and
Authority for fiduciaries of terminating defined contribution plans to use the PBGC Missing Participant Program.
Uniting participants with their retirement benefits has been a priority for the DOL for a number of years, as well as for plan sponsors and fiduciaries who want to see their employees benefit from their hard earned retirement dollars. In that regard, while additional guidance is always welcome, as discussed below, several of the DOL’s best practices could be viewed as impractical at best, or at worst, unworkable by plan fiduciaries.
The DOL recently issued Field Assistance Bulletin 2021-01, blessing the PBGC’s Missing Participant Program as an additional method of addressing a perennial issue in 401(k) terminations.
The problem of “missing” participants and beneficiaries (individuals for whom the plan administrator does not have adequate contact information) is an ongoing issue for retirement plan.