Terminated PBGC Cov'd DB Plan - Missing vs. "Not Responding"

[Guest EMC]

For purposes of a terminated DB plan cov'd by PBGC, is there a distinction between participants who are "missing" (sec. 4050) and participants who just don't respond to the notice requesting that they elect their benefit distribution forms? We have a fairly old termination (several years ('96/'97)) and a few genuinely "missing" particpants, and a few other participants who have just never returned paperwork re: the distribution.

Before the effective date of the current ERISA section & regs on "missing participants" (i.e., before 1/1/96), was it an option for the DB plan sponsor to take possession of lost participants' plan assets upon the plan's termination and keep them segregated on the books of the plan sponsor until the participant was located or came forward? Current ERISA 4050 only allows 2 alternatives: (i) annuity, or (ii) turn benefits over to PBGC, but several people have mentioned this alternative to me as an option.

Thanks.

[david rigby]

It seems unlikely that any plan sponsor would want to "take over" these assets, when there is a viable mechanism for doing otherwise.

I have used the PBGC Missing Participant program twice. Although there is a bit more paperwork, I appreciate having it available. Nice to be able to get rid of these benefits without having to worry about whether you did the right thing. So much cleaner.

In my opinion, if you have "non-responding participants", it is reasonable to treat them as "missing". To do otherwise would force the plan sponsor to "keep open" the entire process. However, you might want to make sure the non-responders have been informed of the consequences.