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Has anyone used the PBGC DC Plan missing participant program?


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Long time reader - first time post. We have a profit sharing plan that terminated and is in the process of distributing assets. Unsurprisingly, there are several unresponsive participants, as well as one missing participant. We are reviewing options for disposition of those account balances. We have completed the IRS/DOL requirements for searching, sending certified letters, etc. Under the DOL safe harbor, the preferred method of distribution is to roll over account balances to IRAs the employer establishes for the missing/unresponsive participants. In the past, we have used Millenium Trust (MT) for such rollovers. In 2017, the PBGC expanded its missing participants program to include defined contribution plans. We are considering whether this is a good or better option than IRA rollovers and are wondering if anyone has used the PBGC program for a defined contribution plan. If you have used the program, do you have any thoughts on or experience with their process? And why did you choose to use it instead of IRA rollovers? If you haven't used it, did you consider it? What were your reasons for not using it?

Here are some pros and cons we've considered:

IRA rollover -

Pros: well-known and well-used provider, purports to comply with ERISA safe harbor, participant can contact IRA provider and choose among investment alternatives or roll over to another plan/IRA

Cons: must send notice to participants at least 30 days before transfer, not sure how safe the safe harbor is

PBGC program -

Pros: no prior notice required (probably a good idea to notify participants, but not necessarily before transfer)

Cons: program is new and unknown, there's only one investment option for participants (participant would have to take distribution, presumably in cash, and roll over to IRA to invest differently and also come up with the mandatory withholding amount out of the participant's own funds if the participant wanted to roll the entire amount), no rollover option (as far as we can tell)

Another consideration is fees. MT charges fees to the participant, while the PBGC program charges fees to the plan sponsor (and the PBGC fee is lower than the IRA fees). Presumably, a participant could argue that the plan sponsor chose the IRA provider because the plan sponsor didn't have to pay any of the fees. But the plan sponsor could argue that they chose the IRA provider because it satisfied the DOL's safe harbor.

Thoughts on pros and cons?

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