QOTW: SSA Letter

A member recently reached out wondering if any other members receive a lot of inquiries from former employees about a letter from the Social Security Administration stating that they may have a retirement benefit with the company. As these letters tend to cause confusion, the member was wondering if there is a standard template or language companies use to respond to these inquiries. Sixty-four percent of respondents indicated they receive these types of questions and because PSCA members* are the best, several provided sample responses they use which you can download here and modify as needed. 

Other comments from members about this issue include:

• After looking through our documents and past plans I just call and confirm we have nothing.
• As I get them infrequently, I generally will call them back and point out that the letter says "may" and that it is a standard letter sent to everyone. Then I assure them that they have previously received their 401K distribution and fortunately have been able to validate for anyone calling in that the distribution happened previously.
• Depends.  Most had already received a payment from the plan, so we send them a detailed letter letting know when, how much and whether the payment was rolled over, etc.  If they have not received any type of payment, we send them information regarding how to start they payments and may ask for some additional information (for the pension plan, ask if they are married for J&S calculation purposes).
• For my company, we dig in and research the issue and try and find out whether a legitimate account balance resides out there or di they cash out.  It would be nice for the SSA to reconcile the results sent to them instead of creating more confusion.
• I do have a standard email reply - I really don't send letters anymore.  Typically we get phone calls or emails.  I find that it is important to get them to understand up front that this was reported a long time ago usually, and that we are not required to let the SSA know when the participant comes back to move their funds.  That usually helps when they find that there is no balance.
• I do investigate, 99.9% of the time they do not.  I just let them know that they do not have any funds and that the SSA sends the letter out as a notice, not guarantee that they might have funds.
• I do not have a standard template I use. I explain SSA receives the information via IRS reporting (5500) and the letters are notifying the employee there "MAY" be a benefit available because they received the information at one point in time. If they still have benefit, I review the benefit on record. If they do not, I explain the benefit was previously distributed via method they chose after leaving the company.
• I send a letter/email with standard information about the form and why they received it.  I research first to make sure the individual doesn't have an unpaid benefit.
• I send them to the retirement plan recordkeeper, usually after I check online to see if they have an available benefit.
• I use a template and in the letter I confirm they have deferred vested benefits and to reach out to our recordkeeper with any questions.
• If a participant still has a retirement benefit, then we send the appropriate paperwork for the distribution. If the participant does not have a retirement benefit, then we send proof that the retirement benefit was paid out.
• Infrequent questions are answered individually.
• Inquiry handled case by case. No template for responses
• It is almost always through a phone call. We simply explain why they are getting the letter and look them up to see if they have an account. They usually don't. We have made tons of acquisition and merged tons of plans over the years, so we explain how accounts move with mergers and give them phone numbers for prior recordkeepers if they don't remember taking their distribution. Which they usually don't. It's a pain but we feel helping them figure it out is better than a form letter. Once in a while, we have someone who refuses to believe us, and then we send a letter, based on their circumstances. A time or two, they've called the DOL and someone from the DOL will call us. But that's a simple conversation. It's a pain, but they have a right to a thorough explanation.
• Letter stating that the benefit was paid in full with the year paid and a copy of the distribution (if available).
• Most of our former employees reach out by phone, so we simply look them up in the system to see if they have any remaining benefits with us and let them know.
• No template. Our situation is different. We have a frozen TSA plan that is usually the cause.
• Research as best I can. 99.9% of the time, the former employee had taken a distribution they forgot about.
• response depends upon 1) if they have already been paid out a lump sum and don't remember 2) are in pay status already or 3) are entitled to the benefit.
• Response is on an individual basis.
• The letter is a notice of potential benefit. The participant may or may not have taken the benefit already but SSA doesn't know that. I prefer to call the person and talk to them. If possible I give them the timing of when they took it  and refer them to their own tax records. Or if they have a benefit, how to access it. We even get these inquiries about terminated Plans we once had.
• The question is infrequent so there is no form letter.  We'll look to see if an account exists and follow up accordingly
• They usually call and I look up their balance while on the phone. So far no one has actually had money in the plan by the time they receive a letter form the SSA.
• This happens on a regular basis.  The problem is that plan sponsors do not remove the former employees off Schedule SSA of Form 5500.
• This is usually a phone call.  We respond by looking up the former employee's information.  If there is still a benefit, we direct them to the vendor partner that can help them with the benefit.  If there is no benefit (meaning they've already received it) we let them know that and provide some information about when they would have received it.  If they insist they have not, then we ask them to send us the letter so we can research, and we respond on an individual basis depending on what we find - typically we send them copies of the paperwork they completed to take the distribution.
• Usually it's a phone conversation, nothing in writing. More often than not, they were a participant in the ESOP and not the 401k.
• Usually they just call me and I check and tell them over the phone that they do not.
• We are usually called about these and we do search to be sure there are no remaining retirement benefits as we have some Legacy contracts. Almost 100% of the time the participant has already withdrawn the benefit on the SSA Letter.   We end up explaining verbally if we do not have the benefit what the letter represents.  We tell them when they took the benefit if we are able to identify a date/timeframe.
• We direct them to the plan sponsor for the benefit listed on the SSA letter.
• We do have a standard template, but this is a difficult matter to explain to prior participant's satisfaction.
• We do not have a sample letter.  It's usually a phone call, and we verbally tell them to contact our 401(k) record keeper for information about an active account.
• We do not have a sample template yet but the basic answer is explaining why this is sent and the fact that the benefits have been paid out and no further benefits are payable. In may cases, the SSA notice is for a period of time in which we were not the plan administrators so we urge the former participant to check their tax returns as the distribution would have been reported in the year in which they took the distribution.
• We do not have a standard letter.  Usually it is a verbal conversation.
• We do not have one but would love the opportunity to review any templates that others are willing to share!
• We don't have a letter, however we do check to see if there is a balance.  We also explain that the SSA does not regularly receive notice when a distribution occurs and their records are potentially out of date.
• We don't have a standard response. We just refer them back to SSA office.
• We have an individual who handles these questions in another department.
• We have only received one inquiry previously, and it was via phone.
• We look up their account - if they have one we tell them to contact the recordkeeper; if they do not, we explain that the letter indicates they may have had a benefit in the past but one is not showing at this time, which means they must have taken a distribution of the account at some point in the past. We recommend they check their tax records for the time period between the date of record on the letter and present to see if they received a 1099-R that they filed with their taxes at some point, which can help them to remember if they rolled it to another plan or took a cash distribution.
• We respond with either a letter, an email or a phone call depending on how we received the request and the depth of information within the case.
• We tell them that this letter does not mean they have a retirement benefit and we refer them to the retirement plan company for further info.  The question is usually from employees who term'd a while ago.
• We verify if there's an active account. If there is, we inform them to contact our recordkeeper. If they don't, we inform them of when the balance was paid out. If the account is too old to verify, we respond saying we've reviewed our records and determined that no benefit remains.
• Yes. Template and then forward to recordkeeper to validate.

*Remember one of the great benefits of PSCA membership is to be able to ask other members for resources or see how they handle specific issues – if you need help with something, email [email protected] and we will do a QOTW for you.