Missing Participants Policy and Procedures
(Qualified Retirement Plan)

Summary

This Missing Participants Policy and Procedures is designed for a qualified retirement plan sponsor to establish a process to identify and locate missing plan participants consistent with its obligations of prudence and loyalty under the Employee Retirement Income Security Act (ERISA). This template includes practical guidance, drafting notes, and an optional clause. The Department of Labor (DOL) and Internal Revenue Service (IRS) have focused much of their guidance on missing participants in the context of terminating plans, not for ongoing plans. Therefore, the following sample policy is based on the following guidance on missing participant issues: • DOL, Missing Participants—Best Practices for Pension Plans (Jan. 12, 2021) • DOL, Compliance Assistance Release 2021-01 (Jan. 12, 2021) • DOL, Field Assistance Bulletin 2021-01 (Jan. 12, 2021) • DOL, Field Assistance Bulletin 2014-01 (Aug. 14, 2014) • DOL, Advisory Council on Employee Welfare and Pension Benefit Plans: Locating Missing and Lost Participants (Nov. 2013) • IRS, Field Directive Regarding Missing Participants and Beneficiaries and Required Minimum Distributions (Oct. 19, 2017) –and– • DOL, Advisory Council on Employee Welfare and Pension Benefit Plans: Voluntary Transfers of Uncashed Checks from ERISA Plans to State Unclaimed Property Programs (Nov. 2019) Plan fiduciaries are obligated to make reasonable efforts in locating missing participants and beneficiaries who are due benefits under a plan consistent with their ERISA fiduciary obligations. The task becomes acutely important when participants and beneficiaries become eligible for distribution of their plan benefits, when they reach the age at which required minimum distributions must be made, and particularly when a plan is terminated and all of its assets must be distributed. The DOL and IRS have issued the guidance noted above to assist plan administrators in meeting their duties in attempting to locate missing participants and beneficiaries. In 2021, the DOL furnished further guidance in recognition of the persistent problems facing plans in this regard and newly available tools and resources to find missing individuals and to handle their plan account balances when they cannot be found. Among other things, the DOL acknowledges and supports the PBGC's 2018 expansion of its missing participants program for terminating plans to cover defined contribution plans on a voluntary basis. The agency has adopted a nonenforcement policy that effectively allows plan administrators of terminating defined contribution plans to use the PBGC program with the comfort that doing so will be treated as consistent with satisfying its fiduciary duties in the same manner as following the safe harbor rules for setting up an individual retirement plan account for missing participants and beneficiaries pursuant to 29 C.F.R. § 2550.404a-3. See FAB 2021-01. For a practice note advising fiduciaries on missing participant issues in retirement plans, see Locating Missing Participants in Qualified Retirement Plans. For steps to follow in handling missing participants in an ongoing retirement plan, see Missing Participants Best Practices Checklist. For steps to follow in handling missing participants when terminating a retirement plan, see Missing Participant PBGC Program Procedures Checklist.