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Lump Sum Window for Missing Participants

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Assume a DB plan offers a lump sum window.  Shortly after the window closes, the plan administrator is contacted by a terminated vested participant who never received the paperwork because the address on file was outdated.  I would assume that the plan cannot now offer this individual a lump sum because it would conflict with the terms of the amendment that provided for the window (unless the plan is further amended).  However, if the plan administrator was less than diligent in maintaining current address records for its participants, I can see how they might have some culpability here (particularly given the DOL's recent aggressive enforcement in this area).

Surely, this is a fairly common occurrence.  What have others seen in terms of handling?

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The impetus is on the participant to keep the Plan Administrator informed of whereabouts. DOL "aggression" is targeted at missing participants when benefits become due and payable, basically NRA and/or RBD. If a plan had optional early retirement at age 55, it wouldn't have to find and communicate with all TVPs upon attainment of age 55. 

I'm sorry I do not have a suggestion for dealing with what has already occurred other than "too bad, so sad, now you know why you should make sure we have your updated address."

For future reference I can tell you that our window amendments now always have as an eligibility requirement that a participant must have an updated/correct address on file with the Plan Administrator and the PA is not responsible for missing participants/bad addresses - basically a CYA provision.


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Having administered dozens & dozens of LS Windows for DB plans, when this scenario occurred, we have consistently seen plan sponsors tell TV participants like this that they are out of luck, predominantly for the reasons CuseFan cited above (including eligibility being tied to a valid/current address on file).

Fortunately, this has been very, very rare given that we've handled LS Windows for over 100,000 participants, and our best practice is do conduct an address search for all members in the LS Window before materials are mailed, which minimizes this type of situation from happening.

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