The Department of Labor issued long-awaited guidance on missing retirement plan participants Tuesday evening, calling it part of its effort to help plan fiduciaries meet their obligations under ERISA to locate and distribute retirement benefits to missing or non-responsive participants.
The guidance is in three forms:
- Best Practices for Pension Plans describes a range of best practices fiduciaries of retirement plans, such as 401(k) plans, should consider as steps their plan could take to help reduce missing participant issues and ensure plan participants receive promised benefits when they reach retirement age.
- Compliance Assistance Release 2021-01 outlines the general investigative approach that will guide all of EBSA’s Regional Offices under the Terminated Vested Participants Project and facilitate voluntary compliance efforts by plan fiduciaries; and
- Field Assistance Bulletin 2021-01 authorizes, as a matter of enforcement policy, plan fiduciaries of terminating defined contribution plans use of the PBGC missing participant program for missing or non-responsive participant’s account balances.
“The guidance issued today reflects our ongoing commitment to help plan fiduciaries ensure that their plan participants and beneficiaries receive the retirement benefits that they worked so hard to earn,” Principal Deputy Assistant Secretary of Labor for EBSA Jeanne Klinefelter Wilson said in a statement. “In fiscal year 2020 alone, EBSA’s investigators helped missing and non-responsive participants recover benefits with a present value in excess of $1.4 billion.”
The issue of missing participants has existed for some time, with former EBSA head Preston Rutledge specifically addressing it at the 2019 NAPA 401(k) Summit.
“We want to understand the process and procedures [for finding missing participants] up until now so we can better understand,” he told advisor attendees at the time.
However, he added that audits traditionally focused on whether benefits have not been paid for some time.
“The purpose of a [defined contribution] is to make sure accrued benefits are paid. There’s so much focus on the accumulation of benefits, but what’s the point if they’re not paid.”
Tags: 401kDepartment of LaborDOLEBSAretirement