Termed Participants with bad addresses

[Guest Elfman]

We have many participants in a plan where we cannot find the current address. We have sent their SSN thru the IRS and they forwarded to the last known address. We have exhausted all possibilities of reaching these people. We still have about 16 people who we did not hear from. We would like to kick those participants out of the plan, however, our administrator has stated that we cant kick them out (ie. send the money to the state Unclaimed Funds).

Is that true? If the IRS cant find them, and we cant send the money to Unclaimed funds, then we have to keep them on the plan forever?

Thank you for any help you can give!!!

[Guest Nautical]

Can PBGC take over this terminated plan? Have them keep up with locating these participants?

Also, have you considered contacting the SSA? If the address is not available from any other source, the plan administrator may contact the SSA for assistance in forwarding a letter. The request to forward a letter should explain the strongly compelling reasons for wanting to get in touch with the missing person. The letter to be forwarded should be in a plain unsealed, unstamped envelope bearing only the mising persons anme and social security number. If the social security number is not known, SSA will need the date and place of birth (or names of parents, etc) and even last know address and on top of that employment period. The request should be sent to the manager of the local Social Security office.

We had to do this once and we were successful because the individual was paying into the social security system and they had a current address on this participant. Also, one last thought, are they dead? Maybe you did a death check as well. www.rootsweb.com is Free. Heck, I found 10 people by looking up their name in google and also white pages. I just started calling people that had a similar name, scary, but I did find them!!!

[Guest Nautical]

Also, I found about 30 individuals through www.classmates.com and www.reunion.com. Hey there are some great sources out there than companies do not even use that are free. I used their resumes to find out what highschool they attended. YOu could post it on unclaimed boards, but everyone and anyone will call to try to get the money. I would use the unclaimed property as a last resort.

[Guest Nautical]

I am hogging this board, one other thought is the post office keeps a "change of address" record on all individuals. You may want to contact them to find out how you gain access to this information. If they say no, call back until you get a manger who understands the process.

Also, can you pay for a credit report on the individual? Usually address on on the credit report or current or previous employer (other than you) so you can go that route as well....

[R. Butler]

There are several discussions on this. Below are link for recent ones.

http://benefitslink.com/boards/index.php?showtopic=29954

http://benefitslink.com/boards/index.php?s...pic=29442&st=15

[Guest Nautical]

This is the best free people search website

www.zabasearch.com

Type in your name, you will be surprised....

[Guest Elfman]

Hey All,

Thanks for the replies. I have already sent a request to the SSA to forward the letters and we got many responses from it. I will try the suggested websites and maybe that will help us clear out a few more. I still have a couple of questions/comments...

This plan is not terminating. We just want to kick these people out of the plan. These people obviously forgot about their money. They are more likely to track their money from the unclaimed funds division versus having their money just sit in this plan for year. Is it legal to send the money to the State Unclaimed Funds?

I am being told "no", but I just cant believe that these people will have to sit in the plan until the end of time.

Your assistance is appreciated!!!!!

Elfman

[mbozek]

E: Under IRS regs, benefits of terminated participants who cannot be located can be forfeited and allocated to other participants, subject to reinstating their benefits if they claim the funds at a later date. Lost participants who can not be located after attempting contact through IRS or SSA rarely return to claim benefits. Why not amend the plan to forefit the benefits?

[Guest Pensions in Paradise]

Elfman - to answer your question directly, NO, it is not legal to send the money to the State Unclaimed Fund. Refer to mbozek's post for the correct solution to your problem.

[FJR]

Am I missing something? Why wouldn't you utilize the automatic rollover IRA option if they have under 5K balances?

[Guest Elfman]

Mbozek - so just transfer the balances to the forfeiture account to be used to offset expenses or employer contribution? That seems to create a financial incentive to not find lost participants.

JFR - they do have auto rollovers btwn $1-5k, a cashout provision for under $1k. Does the IRS/DOL allow for a rollover if under $1k? or does it have to be cashout?

Thank you everyone,

Elfman

[R. Butler]

Mbozek - so just transfer the balances to the forfeiture account to be used to offset expenses or employer contribution? That seems to create a financial incentive to not find lost participants.

JFR - they do have auto rollovers btwn $1-5k, a cashout provision for under $1k. Does the IRS/DOL allow for a rollover if under $1k? or does it have to be cashout?

Thank you everyone,

Elfman

What does the plan document say about forfeiting balances of lost participants?

Has the plan been amended for the automatic rollovers? What does the amendment say about rolling over balances of less than $1,000?

[mbozek]

Elfman- Most vendors charge a set up fee for involuntary rollovers as well as a transfer fee to open the account. This deters direct rollovers for small amounts. The plan can retain the account and charge the admin fee against the balance.

I dont see how forfeitures deters searching for lost participants because the benefits can only be forfeited if the participant cannot be found, which requires that an attempt be made to locate the participant. The plan is not required to conduct an exhaustive search to find someone who has left no forwarding address.

[Guest kencarroll]

Elfman - My firm is a provider of Safe Harbor Automatic Rollover IRA's. If your plan documents allow for automatic rollovers, we would be happy to assist you. The DOL requires a notification be sent to the last known address. Even if the letter comes back undeliverable, you have met your fiduciary obligation to deliver the notice. There are not minimums number of accounts or assets, and no set up or transfer fees. We charge an annual fee of $50 directly to rollover participants and take on the responsibility/liability of the participant. You can find us at www.savedaily.com or call toll-free 877-728-5539.....