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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.
Department of Labor DOL Field Assistance Bulletin 2021-01, blesses PBGC’s Missing Participant Program as an additional method of addressing a perennial issue in 401k terminations – the problem of missing participants and beneficiaries with remaining account balances.
Monday, January 25, 2021
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 administrators. It is also an area to which the DOL has dedicated significant attention in recent years, particularly in its enforcement actions, which has been a challenge for administrators. While there are general requirements under ERISA to maintain adequate plan records and distribute materials to participants and beneficiaries, there has been little in the way of specific DOL guidance regarding missing participants outside the context of plan terminations. However, on January 12, 2021, the Employee Benefits Security Administration’s (EBSA) issued two pieces of helpful guidance, (i) outlining best practices for dealing with missing participants and (ii) explaining EBSA’s processes with respect to its Terminated Vested Participants Project (TVPP) au