Stale Dated Checks

[Guest sleightholm]

What is the implication to the plan where distributions from the plan to former participants are made in the form of checks and that the particpants have not cashed the checks and the stale date has been exceeded by a number of years? Besides owning the particpant the original amount of the distribution is there an interest payment also due. What law,case, etc. would address this issue?

[Guest halka]

Good starting point is "Handling 'Lost' Participants" By ELINOR R. MERL and FRANCES G. SIELLER in Journal of Pension Benefits - Autumn '94. It should be helpful.

I think you can provide benefits for a missing participant or beneficiary either through the purchase of an annuity from an insurer or by paying funds on behalf of the missing individual to PBGC PBGC will search for the participant or beneficiary and pay benefits to those who are located. Terminating plans are subject to special rules.

Where nominal amounts are involved we have on occasion simply deposited the distribution in a savings account in name of participant. It may eventually end up escheating under state laws. But, it's out of our hair.

[LCARUSI]

Will the PBGC help with accounts in Profit Sharing Plans, i.e. plans which are not covered by the PBGC?

[This message has been edited by LCARUSI (edited 09-25-98).]

[Alonzo]

Unfortunately, the PBGC will not help you in finding missing participants, if your plan is a dc plan.