Check out our more recent article on this topic with updated guidance from the U.S. Department of Labor detailing the actions that employers must take to locate missing retirement plan participants and ensure they receive their benefits.


The Search for Missing Participants Continues: DOL Guidelines and Best Practices

OCTOBER 28, 2021

“If at first you don’t succeed, try, try again.” It may not be the mantra of plan sponsors, but this old adage certainly sums up the Department of Labor’s (DOL’s) approach to the fiduciary duty of searching for missing plan participants. Are You Looking for Missing Participants?

Earlier this year, the DOL released three documents on missing participant guidance that provides additional guidance to employers in their quest to locate retirement plan participants. Whether active or terminated, retirement plans are designed to provide benefits and it is the plan sponsor’s responsibility to routinely search for missing participants.

Best Practices for Your Search

The DOL noted that plan fiduciaries should consider what practices will yield the best results for their retirement plan, taking into account the participant population, size of the particular participant’s account balance, and the cost of search efforts.

These are the best practices the agency recommends for searching for missing participants:

  • Glean participant, beneficiary and next of kin/emergency information from other benefit plans and employer/payroll records
  • Check with emergency contacts and designated beneficiaries
  • Take advantage of free online search tools, including social media (e.g., Facebook and Twitter) and search engines, or use proprietary internet search tools
  • Use a credit-reporting agency or commercial locator service, or review public records that may include real estate taxes or mortgage information
  • Attempt contact via certified mail or a private delivery service to the last known address, or attempt contact by email, text or social media
  • Search death records and obituaries if participants have not responded; then send communications to beneficiaries, as appropriate
  • Reach out to employees or union officials who worked with the missing participants
  • Register missing participants on public and private pension registries, such as the National Registry of Unclaimed Benefits, and inform participants of the registry

Documenting policies and procedures related to locating missing participants and beneficiaries, including key decisions and actions that you’ve taken to implement those policies, is considered a best practice by the DOL. In addition, the agency advises plan sponsors to ensure recordkeepers are performing agreed-upon services and implementing effective communication practices with participants.

Avoid the Red Flag Issues

By conducting regular searches, the DOL states that plan sponsors can avoid these “red flag” examples of problematic missing participant issues:

  • The plan has more than a “small number” of missing or non-responsive participants
  • There’s a considerable number of participants who terminated employment with a vested benefit and reached normal retirement age, but have not started their pension benefits
  • The plan’s records contain inaccurate, incomplete or missing census data and/or contact information, such as incorrect mailing or email addresses, missing phone numbers, partial Social Security numbers, missing birthdates or spousal information, or other “placeholder” entries are being used for birthdates or for names.
  • There is no evidence of sound policies and procedures for handling:
    • Undeliverable or returned mail
    • Checks that have not been cashed

There are several actions plan sponsors can take to prevent red flag issues, and as mentioned above, a key solution is to ensure the plan’s census information is current. The DOL also suggests these steps to reduce the number of missing participants:

  • From time to time, contact active and retired participants and beneficiaries to confirm or update contact information. This could include social media and next of kin/emergency contact information.
  • Simplify the ways for participants to update their contact information by:
    • Including contact information change requests in communications to participants
    • Allowing online changes to update contact information for participants and their beneficiaries
    • Prompting participants and beneficiaries to confirm or update contact information when logging onto the online account, and then following through to make those changes in the census data
  • Log undeliverable mail or email, and uncashed checks for follow-up
  • Pay close attention to mergers and acquisitions, or a change of recordkeepers. It is common for plans to lose track of participants during these events, and the DOL recommends sponsors make missing participant searches of the retirement plan, health and welfare plans and payroll records part of the collection and transfer of records.

Set Protocols to Communicate Effectively

Communication is the common denominator in resolving missing participant issues and the DOL suggests sponsors use these approaches when reaching out to participants and beneficiaries:

  • Use easy-to-understand language, offer non-English assistance, and encourage contact through the plan/plan sponsor website and toll-free numbers.
  • State prominently what the correspondence is about, and make it easily identifiable. For example, if a pension plan changes its name after the participant terminated employment, use the name of the plan that was in use while the participant was an active employee.
  • Let participants know how the plan can help consolidate defined contribution plan accounts or roll over IRAs.
  • During the onboarding and exiting processes, incorporate steps for the employee to confirm/update contact and other necessary information to calculate benefits, and remind them of the importance of maintaining current contact information.

This information is provided solely for educational purposes and is not to be construed as investment, legal or tax advice. Prior to acting on this information, we recommend that you seek independent advice specific to your situation from a qualified investment/legal/tax professional.