The DOL’s released guidance in January 2021 to help plan sponsors keep track of participants. Finding former employees who still have plan balances but no longer work for the company can be challenging, and losing track of them may be a fiduciary issue because of the “exclusive benefit” rule in ERISA. This rule requires that plans diligently seek to distribute assets, even to missing or unresponsive participants.
Best Practices for Pension Plans is one of three related publications released by the DOL on January 12, 2021. It provides information to help plan sponsors recognize red flags that could lead to losing track of participants, and cites examples of best practices to avoid the situation.
A few of the DOL’s suggestions for avoiding trouble with missing participants include:
- Maintaining accurate census Consider periodic contacts with participants and beneficiaries to ensure their contact information is correct. Endeavor to keep home and work addresses, phone numbers, social media contact information, and emergency contact information.
- Following up on undeliverable mail or email and uncashed
- Keeping beneficiary information up to date.
- Putting the plan’s policies and procedures in writing, and being consistent in following
If you do “lose” participants, try:
- Cross-checking other contact information that may be available, such as health plan records, for data that may lead to the missing
- Asking colleagues who worked closely with the missing participant if they have a forwarding Of course, it is important to maintain privacy, so you may want to ask the colleague or beneficiary to forward a letter for you, or to ask the missing participant to get in touch with your office.
Click here to access the DOL’s guidance.