Missing Participants

Fiduciaries of defined contribution plans have an obligation under ERISA to locate missing participants and properly distribute the participants’ account balance.  The plan’s participants should be contacted for direction on how to distribute their account balance regardless of their length of service or the size of their account.  It is common, for participants to fail to respond to these notices, or mail sent to their address is returned creating a problem for the plan administrator who has an obligation to search for missing participants and distribute their benefits.

If a participant doesn’t respond with the information necessary for a distribution, or the plan fiduciary reasonably believes that a participant has not informed the plan of a new address, steps need to be taken to locate the participant or a beneficiary.  At a minimum, the plan should take all of the following steps before abandoning efforts to find a missing participant and obtain distribution instructions.

  1. Use Certified Mail – a method that uses the address on file with minimal cost incurred to determine if the participant can be located in order to distribute benefits.
  2. Check Related Plan and Employer Records – more up to date information may exist in employer records or the records of another plan (such as a health insurance plan).
  3. Check with Designated Plan Beneficiary – contact the missing participant’s designated beneficiary to find updated contact information.
  4. Use Free Electronic Search Tools – Utilize Internet search tools that do not charge a fee to search for a missing participant such as internet search engines, public record databases and social media.

If the above required search steps do not locate the missing participant the plan needs to consider if additional search steps are appropriate.  The size of a participant’s account and the cost of further search efforts should be considered when determining if any additional search steps are appropriate.