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Employee Benefit Services

DOL to Plan Sponsors: Find Missing Participants

Several recent Department of Labor (DOL) investigations in Philadelphia have revealed that retirement plan benefits due to participants in qualified retirement plans were not being paid because plan sponsors claimed participants were “missing.” The DOL, however, was easily able to locate these missing participants and recovered benefits totaling more than $165 million. As a result, the DOL is expanding this Philadelphia pilot program nationwide.

Plan sponsors have a fiduciary duty to locate missing participants and to have a process to ensure that all plan beneficiaries receive their benefits under the plan.

The acting director of the of the DOL’s Employee Benefits Security Administration, Timothy Hauser, announced that there will soon be new guidance regarding standards that plan sponsors must follow to locate missing participants. Until the new guidance is released, the following due diligence steps should be taken:

  • Send a certified letter to each “missing” participant’s last known address.
  • Maintain good records on efforts to locate terminated vested participants. In the case of a merger or acquisition, pass those records on to the successor employer.
  • Contact co-workers of terminated vested participants and ask them if they know how to get in touch with the participant.
  • Contact the participants beneficiaries.
  • Contact missing participant’s through their phone numbers.
  • Use a commercial locator service, internet search tools, and/or credit reporting agencies.

DOL auditors will review plan sponsors’ efforts to locate and contact missing participants and may treat the failure to do so as a breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA), which can result in substantial penalties. Plan fiduciaries could be personally liable to pay participants their missed benefits.

With increased scrutiny from the DOL, it is imperative that plan sponsors establish procedures to communicate with former employees who have unclaimed retirement plan benefits.

If you have questions or would like more information, please contact Therese Cheevers at or 844.4WINDES (844.494.6337).
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