Compliance News | January 14, 2021

New DOL Guidance on Missing Participants in Retirement Plans

Investigations of missing retirement plan participants have been a major component of the DOL’s plan audit program for many years. For most of that time, plan sponsors have been requesting that the DOL clarify what procedures and information it is looking for and that there be regional consistency.

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On January 12, 2021, the DOL issued three pieces of guidance addressing some of those requests. Together, the documents describe what the DOL considers best practices in missing-participant searches and what procedures and processes the DOL looks for during a missing-participant investigation.

The new guidance

Missing Participants — Best Practices for Pension Plans is an informational document that identifies “red flags,” including:

  • Not having systems in place to avoid missing participants losing benefits
  • Having structural and search practices that minimize missing-participant violations

Although this document applies to private sector plans, sponsors of public sector plans may also find it useful.

Compliance Assistance Release No. 2021-01 provides information for regional DOL directors on investigative processes and case-closing practices that all regions should follow when examining DB plans. This guidance includes an instruction to the regional directors that if plan fiduciaries provide appropriate remedies for affected individuals and correct flaws in their recordkeeping, communication, search and other relevant policies, they should not cite individual plan fiduciaries for specific violations of ERISA when closing out a case.

Field Assistance Bulletin No. 2021-01 establishes a policy that it’s acceptable for sponsors of terminating and abandoned DC plans to use the PBGC’s missing-participant program for their missing participants.

There are a lot of details in the guidance that we’ll address in future compliance insights.

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.

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