Defined Contribution

Lost but Not Forgotten: DOL Guidance on Missing Participants

Lost but Not Forgotten: DOL Guidance on Missing Participants
2 min 33 sec

Retirement plan participants can go missing on occasion. This is an issue for defined contribution (DC) plan sponsors as smaller or inactive plan balances may decrease their economies of scale, increase risk to the plan, and complicate the fiduciary’s obligation to provide ongoing required notices. It is also an issue for participants who may be missing part of their retirement benefits.


Participants can go missing following separation from service, address changes, name changes, or a variety of other circumstances. This group can include either participants whose mail is returned as undeliverable or those with outstanding stale checks (e.g., minimum required distributions that are forced out of the plan).

Beginning in 2017, the U.S. Department of Labor (DOL) implemented the Terminated Vested Participant Project, which focused audit efforts on missing participant issues. In fiscal year 2020, the Employee Benefits Security Administration (EBSA) closed 1,122 civil investigations, with 67% of those audits resulting in monetary results for plans or other corrective action — $1.5 billion tied directly to missing participant enforcement. And while the DOL has issued missing participant guidance for terminating DC plans (e.g., FAB 2014-01), until now there has been little regulatory guidance on what steps ongoing plans should take. In some cases, the plan document can provide guidance on how to handle these situations, but in general direction has been lacking.

In response to this gap, the EBSA released guidance earlier this year. Recommended steps include:

  • Requesting participants confirm their contact information regularly (e.g., on the DC plan’s website or company intranet)
  • Including a reminder to update contact information on recurring communications
  • Flagging undeliverable mail/email and uncashed checks for follow-up
  • Conducting missing participant searches; reviewing other employer records (e.g., health plan or payroll records); using free online search engines, public records databases, and social media; employing a commercial locator service, a credit-reporting agency, or a proprietary internet search tool to locate individuals
  • Using government programs (e.g., U.S. Postal Service certified mail to the last known mailing address, Social Security Death Index)
  • Attempting contact via other available means such as email addresses, telephone and text numbers, or contacting beneficiaries or the employee’s emergency contacts
  • For unionized employees, reaching out to the union’s local offices and through union member communications to find missing retirees

Importantly, the guidance package noted that plan fiduciaries can consider the cost of the search and the size of the participant’s account balance. And, as with all plan management tasks, documenting procedures and actions is key to good plan governance.

If a participant cannot be located, the plan sponsor has the option of forfeiting those accounts (which can be reinstated should the participants be found) or escheating to the state, depending on the terms of the plan document.

Bottom Line

Plan sponsors should work with their recordkeeping partners to understand their ability to regularly audit plan census information and to search for missing participants. Determining which steps to take should incorporate a review of ERISA’s fiduciary duties, including the duties to act with care, skill, prudence, and diligence, along with the privacy concerns of social media or beneficiary outreach.

Posted by

Share on facebook
Share on twitter
Share on linkedin
Related Posts
Defined Contribution

Department of Labor Provides Cybersecurity Guidance

Benjamin Taylor
An excerpt from an article by Ben Taylor on new cybersecurity guidance.
Defined Benefit

PCE and CPI: What’s the Difference?

Fanglue Zhou
Fanglue Zhou explains how CPI and PCE differ and why the Fed prefers the PCE.
Defined Benefit

Gains for Just About Every Asset Class in 2Q21

Kristin Bradbury
Kristin Bradbury assesses how U.S. and global stock, fixed income, and real assets markets performed in 2Q21.
Defined Benefit

Wall Street Bets on Transitory Bumps in Inflation

Kristin Bradbury
Kristin Bradbury analyzes how the U.S. and global economies and global markets performed in 2Q21, and assesses the outlook coming out of the pandemic...
Defined Benefit

Putting Values into Action: A Practical Guide for Institutional Investors

Brad Penter
Lauren Mathias and Brad Penter discuss how investors can incorporate racial equity into their investment programs.
Defined Benefit

A JOLT of Inflation from the Labor Market?

James W. Van Heuit
Jim Van Heuit discusses recent changes to the labor market and what impact they may have on inflation.
Defined Benefit

Tips on TIPS

Kristin Bradbury
Kristin Bradbury explains TIPS and their potential role in investment portfolios.
Defined Benefit

The U.S. Economy, Now Open for Business

Jay Kloepfer
The U.S. economy may be on track for a truly eye-opening expansion, with initial projections pointing to growth rates of 9% or even higher for 2Q.
Defined Benefit

When the Passive Index Is an Active Decision

Weston Lewis
Because of differences in passive indices, investors should understand how the one they choose will affect benchmarking.
Defined Benefit

Capital Markets Assumptions and the Future

Greg Allen
CEO and Chief Research Officer Greg Allen analyzes how Callan's capital markets assumptions have compared to actual returns.