Plan Termination with Deceased Participant (No Bene)

[Guest Marianne]

Currently working on a Plan Termination and discovered one of the participants is deceased. This participant terminated in 1993 and since then the plan changed recordkeepers. The participant had no activity on our recordkeeping system. The Plan Sponsor does not have record of this participant’s beneficiary, since it was so long ago.

Mail sent to the last address of record never was returned to sender, so there was no way of knowing he was deceased until we checked the SSDI.

We cannot open an IRA for this deceased participant, since there is no beneficiary information. We would like to close out this plan, but cannot. Any suggestions? Are we able to move the unclaimed property to the state?

Thanks.

[mbozek]

Currently working on a Plan Termination and discovered one of the participants is deceased. This participant terminated in 1993 and since then the plan changed recordkeepers. The participant had no activity on our recordkeeping system. The Plan Sponsor does not have record of this participant’s beneficiary, since it was so long ago.

Mail sent to the last address of record never was returned to sender, so there was no way of knowing he was deceased until we checked the SSDI.

We cannot open an IRA for this deceased participant, since there is no beneficiary information. We would like to close out this plan, but cannot. Any suggestions? Are we able to move the unclaimed property to the state?

Thanks.

There are services that will track down beneficiaries for a fee. If you know where the participant died you should be able to get a death certificate listing next of kin.

What does the plan provide in the case of a missing participant who cannot be located? Is the benefit forfeited? Used to pay plan expenses?

Some states will not accept funds from an ERISA plan as abandoned property because of preemption issues.

From the number of recent inquiries on this topic it is amazing that solutions for this contingency are not provided for when the plan is terminated. Plan termination resolution should have provision allowing Plan admin to dispose of missing participants' benefits in manner permitted under applicable law if no beneficaries can be located after reasonable search or used to defray termination expenses.