Q and A – Plan Sponsors Ask – How To Find Lost Participants

Q: There are a few accounts in our 401(k) plan that belong to people we can no longer find. They moved and didn’t provide a forwarding address. We plan to terminate our plan, which makes it even more important that we find these “lost” participants. What can we do?

A: The Pension Benefit Guaranty Corporation (PBGC) may be able to help. Although the PBGC is primarily about safeguarding DB plan benefits, they said in December 2017 that they will now grant access to their missing-participant database to defined contribution plans terminating in 2018 or later, and to affected participants. That’s good news for you and others with terminating plans, but unfortunately it does not address unlocated participants from ongoing plans. Beginning January 1, 2018, sponsors of terminating DC plans may transfer the accounts of “lost” participants to the PBGC, rather than to a financial institution IRA. The accounts will not be diminished by fees, and instead interest will be paid on the account balance when the participant is located. By having a central location for participant accounts, it is expected that it will be easier for participants to find their money.

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