As plan administrators know all too well, attempting to locate nonresponsive (lost or missing) participants is an ongoing and often challenging process. On January 12, 2021, the Department of Labor (DOL) issued guidance in relation to missing participants in three separate components: Field Assistance Bulletin (FAB) 2021-01, Compliance Assistance Release No. 2021-01, and a separate document, Missing Participants – Best Practices for Pension Plans. The guidance reflects the accumulated practices that have proven to effectively minimize and mitigate problems involving missing or nonresponsive participants, resulting from investigations conducted by the DOL’s Employee Benefits Security Administration (EBSA). EBSA has advised that if the guidance is followed and the plan has acted in good faith, EBSA will not pursue violations under section 404(a) of ERISA.
Best Practices for Pension Plans describes a range of best practices that fiduciaries should consider as steps their plan could take to help reduce missing participant issues and ensure that plan participants receive promised benefits when they reach retirement age; Compliance Assistance Release 2021-01 outlines the general investigative approach that will guide all of EBSA’s Regional Offices under the Terminated Vested Participants Project and facilitate voluntary compliance efforts by plan fiduciaries; and FAB 2021-01 authorizes, as a matter of enforcement policy, plan fiduciaries of terminating defined contribution plans use of the PBGC missing participant program for missing or nonresponsive participant’s account balances. “The guidance issued today reflects our ongoing commitment to help plan fiduciaries ensure that their plan participants and beneficiaries receive the retirement benefits that they worked so hard to earn” said Principal Deputy Assistant Secretary of Labor for EBSA, Jeanne Klinefelter Wilson. “In fiscal year 2020 alone, EBSA’s investigators helped missing and nonresponsive participants recover benefits with a present value in excess of $1.4 billion.”
Please contact your Legacy representative if you have any questions regarding this newly issued guidance. Compiled by David Zabrecky, Director of Compliance Services