Missing Participant Locator Service / Former Employee Tracker

Are you trying to find former employees with pending retirement plans, beneficiaries, or payroll monies to distribute? This is a fiduciary issue that must be handled diligently. In past years, the Internal Revenue Service (IRS) offered the Letter Forwarding Program. For a fee, an employer could pay the IRS to locate past employees, but the program was eliminated on August 31, 2012. Employers had access to a similar program through the Social Security Administration (SSA), which was also eliminated on May 17, 2014.

Many employees leave a company without forwarding addresses. Sometimes employees die, leaving the estate representative unaware of the benefits owed to the deceased estate. The elimination of the IRS and SSA programs has made it even more difficult to navigate these situations.

What is a Missing Participant?

A missing participant is an individual who has account balances or accrued benefits under a qualified plan, is no longer employed with the plan sponsor and cannot be located because he or she never provided forwarding contact information. Sometimes participants die and the beneficiary is unaware of any plan benefits, now owed to the deceased’s estate.

Employers should always do their due diligence to locate a former employee by sending up-to-date plan information to the most current address information on file. This includes payable benefits and required minimum distributions. Of course, employers should ensure this information is kept current.

Employers should document every effort to locate missing participants. If an employer does not do its due diligence to locate a former employee with payable benefits, it is a breach of fiduciary duty. As of August 1, 2016, plans are subject to a penalty of $28 per participant.

How do employers ensure they are meeting their fiduciary requirements?

An employer can use the National Change of Address registry, through the U.S. Postal Service. Sometimes an employer may have to be creative and start with the simple “Google” search.

To save time, an employer can hire a credible third party such as Employers Council to search for a former employee. The locating service should include affordable, easy-to-read data, which is as current as possible. Employers Council’s Former Employee Tracking will provide an easy-to-read report with an address history for the former employee.

If you would like more information on Former Employee Tracking or Missing Plan Participants, contact Zandy at 800.884.1328 or zahern@employerscouncil.org.