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August 26, 2019

Is Your Retirement Plan Missing Participants?

When employees leave their employer, either to pursue other opportunities or retire, funds can sometimes be left in their retirement plan accounts. If the individual fails to update their contact information or actively engage in their account, they may be deemed a “missing” plan participant. Retirement plan sponsors are responsible for making a genuine effort to find these participants, and there are serious ramifications if those efforts are not made. For example, a failure to pay out a benefit to a missing defined benefit plan participant at the normal retirement age could result in substantial penalties upon audit unless reasonable steps were taken to locate the participant. 

Historically, one of the ways to locate missing participants was through a letter forwarding program offered by the Internal Revenue Service (IRS), as well as one offered by the Social Security Administration (SSA). Both of these letter forwarding programs have been terminated, but the fiduciary responsibility of locating missing participants still remains for plan sponsors.

The Department of Labor (DoL) details in Field Assistance Bulletin No. 2014-01 search methods to take as minimum steps to locate and reach a missing participant:

  • Use Certified Mail
    This low-cost method can help determine whether the participant can be located to distribute benefits. The DoL provides model notices that can be used in these efforts.
  • Check Related Plan and Employer Records
    Your plan records may not contain current contact information, but it is possible that other departments within your organization have this information. For example, a group health plan may have up-to-date information.
  • Check with Designated Plan Beneficiary
    Identifying any designated beneficiaries, such as a spouse or child, could help find updated contact information.
  • Use Free Electronic Search Tools
    As a plan fiduciary, it is your responsibility to make reasonable use of the Internet to search for missing participants or their beneficiaries. Online search tools might include search engines such as Google or Bing, public record databases such as those for licenses or real estate, obituaries and social media.

The steps described above were specifically designed to find defined contribution participants upon plan termination. Many sponsors have adopted these steps, however, for other situations that involve missing participants (e.g., initiation of defined benefit plan payments at normal retirement).

As a retirement plan sponsor, it’s your responsibility to ensure that efforts are made to reach missing plan participants and to preserve the account balance available to those participants. You may have privacy concerns that arise during your efforts. These concerns can often be addressed by the use of generic letters or postcards. If you have any questions, please contact a retirement plan professional here.


CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. (NYSE Listed: CBZ) market investment advisory, investment management, third party administration, actuarial and other retirement plan services. Investments, investment advisory and investment management services offered through CBIZ Financial Solutions, Inc., Member FINRA, SIPC and SEC Registered Investment Adviser, dba CBIZ Retirement Plan Advisory Services. Investment advisory and investment management services may also be offered through CBIZ Investment Advisory Services, LLC, SEC Registered Investment Adviser. Third party administration, actuarial and other consulting services offered through CBIZ Benefits & Insurance Services, Inc.

For important disclosures, please visit: www.cbiz.com/rps-disclosures



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