Pros & Cons when Locating Missing Participants

Today we will be discussing the Pros and Cons when Locating Retirement Plan Missing Participants.

In 2021, a report revealed over one trillion dollars in unclaimed retirement accounts across the U.S., which led to many discussions about how best to reach these "missing participants." Following this, the Department of Labor offered guidelines on handling these accounts, emphasizing that plan sponsors should make genuine efforts to communicate with all participants.

So, what are the pros addressing missing participants actively? Firstly, doing so lessens future workloads and decreases potential legal risks. For example, during plan terminations or mergers, all participants must be accounted for, or there might be complications. Secondly, ignoring missing participants might lead to troubles with the Department of Labor or legal issues. If a plan fails to uphold its responsibilities, it could face penalties or even lose its tax-qualified status.

On the flip side, the main con is the administrative challenge. Ensuring continuous communication with every participant, especially if they're missing, can be taxing. Merely sending information isn't enough; there needs to be proof of receipt. This demands a lot of resources.

For more information when locating missing retirement plan participants, contact us today.