QOTW: Missing Participants

This week we asked plan sponsors if they had a formal procedure in place to track missing participants, 

and if missing participants were a concern for the plan. A plurality do have a procedure inplace, and for most that don’t, it is a concern and they are in the process of creating a procedure. Some plans have an informal process in which they are generally able to track participants, and some don’t have a procedure at all and rely on the vendor to handle. Comments from respondents follow. 

Plan sponsors who have a procedure:

• Although not formulated into a policy, we do have a specific process for efforts to find missing participants. Unfortunately, this was as a result of a DOL audit.
• As a retailer, we have a fair amount of turnover so this is a concern
• Deceased participants with no registered beneficiaries.
• I receive a report each month from our Plan Administrator and I review for current and former employees. I am able to request 1x/year that the Plan Administrator do an external search to reach those Missing Participants.  I also contact the former employees by phone or email if I have that information to inform them they are a lost participant and to contact the 401(k) plan to update their address, etc.
• No, our TPA handles this.  Happens very rarely.
• No.  Vendor has first class services and we do overviews.
• Not a concern.
• Not a huge concern for our 401k plan but it's a major concern for the ESOP.
• Not sure how formal, but we reach out to their emergency contact or find them on social media.
• Of course we want everyone to get their dollars. It's also a clean up issue with lots of small balances. Also, the longer they are "lost", the harder they are to find.
• Our Trustee provides a search service to locate missing participants.
• This has been a growing concern for our plan, due to a growing amount of returned mail and uncashed distribution checks; with the DOL focus on lost participants, we decided to institute a formal process through our recordkeeper this year for terminated participants, and document our process for active participants.
• This is a concern - it is time consuming and often does not necessarily yield results - many participants are unresponsive/we are unable to confirm identities - especially difficult when merging new plans into ours
• We pay our recordkeeper to do this for us.
• We send over a list of all the returned mail we get from required mailings so our carrier knows the address we have one file is out of date.   This is a problems since it costs money to send mailings and we want to make sure these notices get to the participants.
• We've been solidifying our procedures.  It started with more regular (now monthly) auto cash out of accounts < $5,000 to get funds to participants while USPS can find them.  Now we're sending letters to participants of old accounts reminding them of their account.  We are doing once a year SSN trace on a letters that get returned to us.  Accounts belonging to terminated participants went from 1/3 of all accounts to roughly 1/5 since we started.
• Yes it’s a concern.
• Yes, especially since we know it's a hot topic for DOL audits...
• Yes, we try to keep track of missing participants to promote better participant ownership.
• Yes.
• Yes.  It would be helpful to know how other employers track missing participants across multiple retirement plans.
• It certainly is, when employees separate service, they don't always stay on top of their accounts.  They typically do not pay attention to their accounts while active then lose track as address, emails, etc.

Plan sponsors who do not have a procedure:

• Creating a formal procedure is on our to-do list for this year because missing participants are a concern.
• However, we are working with our plan administrator (Fidelity) to put a formal procedure into place.
• I am not sure it is formal but we do check regularly.
• It has not been a concern for our plan
• No
• No but I'm interested in learning what other plan sponsors are doing.
• no we only have 1
• not a concern.
• Not a huge concern right now but has been in the past.
• Nothing formal. I do a plan review/audit 2-3 times a year.
• Record keeper tries to assist
• rely on vendor
• We are changing service providers and we believe this will be an area where they can help improve our process.
• We ask employees to update us with address changes but always ask for personal e-mails so we generally do not have an issue.
• While we have some processes, we feel we have more work to do in the way of formalizing procedures and rigor for documentation.
• Yes this is a concern. We do some in-house research in an attempt to find people, do not use outside help or have a formal procedure. Would be interested in knowing best practices on finding missing participants.
• Yes, and we will be developing a formal procedure.
• Not a concern. Small towns, everyone is related.

Plan sponsors who are unsure:

• This is a concern.  I try to contact all employees before they leave employment. Some are great about updating their contact information.  It is when they leave their funds in the company's plan and it is 4 or 5 years down the road.  I think they forget about it. Then we lose track of them.  Our % is low but every year I'm looking for a dozen or so.
• We have had initiatives to track down lost participants.  However, we don't have a recurring process.   I wish our recordkeeper offered solutions to this issue.
• Yes, it’s a concern.