Lost participants

[cdavis25]

Now that we can no longer use the IRS forwarding service, does anyone use a good company to search for lost participants? Google does not always work.

[ETA Consulting LLC]

Now that we can no longer use the IRS forwarding service, does anyone use a good company to search for lost participants? Google does not always work.

Interesting, and good question. I imagine the IRS discontinued the program since you could likely find the missing person faster than the IRS can given the new technological advancements (e.g. internet). Imagine that; the IRS not being able to find someone

I've found a few on the people find software. The next level of search would be to run a credit report, so any company offering these services should be able to "at least" do that step.

Just a thought...

[BG5150]

The next level of search would be to run a credit report, so any company offering these services should be able to "at least" do that step.

Don't you need someone's permission to do a credit check?

[401king]

We've had pretty good luck with https://www.employeelocator.com/index.html. $10 per person. Takes just a few days for the results.

[ETA Consulting LLC]

The next level of search would be to run a credit report, so any company offering these services should be able to "at least" do that step.

Don't you need someone's permission to do a credit check?

No. There is a credit check mechanism that does not 'show up' on a credit report; and does not affect their credit score. You wouldn't, however, run a credit check as if that person was actually applying for credit.

Good Luck!

[Gadgetfreak]

We used to give sponsors who wanted to force out terminees with balances (and breaks in service) the following:

1) We can force out anyone under $1,000 without consent as a direct distribution.

2) For those between $1,000 and $5,000 (our Documents are set up with a $5k limit), they need to first send out certified mail. If it comes back as undeliverable, they need to use the IRS service. If they don't hear from anyone after 180 days, they can do an automatic rollover. We helped process with Penchecks.

Now that the IRS no longer has their free service and the SSA letter forwarding service is $35 (I think), what do you suppose is the best procedures to offer my clients?

Do you think I can simply replace the IRS service with the employee locator service? I thought the DOL specifically mentioned using IRS or SSA. I am not sure you can just replace with another service and still do an automatic rollover. Is there any definitive information on what to do now?

Thanks.

[BG5150]

Now that the IRS no longer has their free service and the SSA letter forwarding service is $35 (I think), what do you suppose is the best procedures to offer my clients?

FWIW, I believe you can charge back the participant's account the fee.

[Gadgetfreak]

I am sure you can but that gets complicated and cumbersome. Also, $35 for a $1000 balance (for example) is a bit excessive when adding our $100 fee already.

[masteff]

As a refresher for everyone, here's the DOL Field Assistance Bulletin on missing participants: http://www.dol.gov/ebsa/regs/fab_2004-2.html

To quote it in part: "In our view, some search methods involve such nominal expense and such potential for effectiveness that a plan fiduciary must always use them, regardless of the size of the participant’s account balance. A plan fiduciary cannot distribute a missing participant’s benefits in accordance with the distribution options discussed below unless each of these methods proves ineffective in locating the missing participant."

From that, I see no way around using the SSA's service.

Have you called the DOL? Even if they can't give you any better answer, they need to be flooded w/ calls about this so they'll realize they need to come out w/ updated guidance. But I bet they stand by their quoted statement about "potential for effectiveness" and won't give any new guidance unless the SSA quits offering the service.

[david rigby]

From that, I see no way around using the SSA's service.

Not sure I would describe the SSA service as "nominal expense".

[Gadgetfreak]

I agree that the DOL says to use IRS or SSA Letter Forwarding Services. We can also assume that they won't be that quick to update their guidance now that the IRS service shut down. In the IRS announcement, they said they were shutting it down because "...numerous alternative missing person locator resources, including the Internet, have become available to assist a plan sponsor or plan administrator in locating a missing participant or beneficiary owed a retirement benefit...".

So this begs the question: Can a Fiduciary rely on OTHER methods for best case efforts to reasonably locate participants (seeing that the IRS is no longer an option and the SSA is prohibitively expensive)? After all, it is just going to an IRA anyway. It is not like they are taking away money from these participants.

Also, I just spoke to a rep at one of the rollover companies who said that they believe the Letter Forwarding services were only to be used for terminating Plans and you could do an IRA rollover for a terminated participant in an ongoing Plan by just sending out a regular (non-certified) letter and waiting 30 days - assuming it wasn't returned. That is a bold approach.

[ESOP Guy]

I like to use this service

http://pbinfo.com/address-location-service/

PBI for one price will use commercial search services. If that finds the person great, but if it doesn't they will do the SSA (used to do the IRS) for you. For the commercial services they send a letter confirming the find.

When they get done they will send you a letter summarizing the search and the steps. The steps outline in their letter meets the requirement for the DOL's requirements for a search. So you either find the person or have documentation you hve met the rules.

One has to like that result.

No, I do not work for them or get paid by them. I just like not having to deal with the problem of lost ees.

[Peter Gulia]

If the employer does not volunteer to pay the plan's administration expenses and the plan's administrator has adopted a written procedure for charging the expenses of locator efforts to the account of the individual to be located, should it be prudent for such an administrator to omit using a locator service if the expense of it is more than (or equal to) the individual's account balance?

[BG5150]

I am sure you can but that gets complicated and cumbersome. Also, $35 for a $1000 balance (for example) is a bit excessive when adding our $100 fee already.

No it's not. The participant should have changed his or her address with either the plan administrator or the asset provider.

[mbozek]

Isnt the a reality check on all of these options the requirement that distributions must commence at some date, either 65 or 70 1/2, for missing participants which means that after exhausting the 4 required options plan sponsors have to pay out the benefits under one of the following:

1. forfeit the benefits under IRS regs subject to restoring the funds in the unlikely event that the participant later appears

2. transfer the funds to a state abandoned property office which accepts the funds

3. transfer the entire account to a federally insured bank account after deducting 20% withholding.

If these options are available when distributions must commence why cannot a plan use them before MRD to prevent reduction of participant's accounts to pay plan admin fees?

[Gadgetfreak]

I like to use this service

http://pbinfo.com/address-location-service/

PBI for one price will use commercial search services. If that finds the person great, but if it doesn't they will do the SSA (used to do the IRS) for you. For the commercial services they send a letter confirming the find.

When they get done they will send you a letter summarizing the search and the steps. The steps outline in their letter meets the requirement for the DOL's requirements for a search. So you either find the person or have documentation you hve met the rules.

One has to like that result.

No, I do not work for them or get paid by them. I just like not having to deal with the problem of lost ees.

ESOP:

I put in an information request to PBI. While I wait, can you please tell me how they get paid their fees (and what are the fees)? Thanks.

[ESOP Guy]

PBI will want to invoice you. It has been a few years since I used them for a large number of people. For the full service to do 1 or 2 people I am thinking it is in the $20-$25 range. That is for the full service were they send the confirm letter and send you the close out letter.

If you have more people the price goes down on a per person basis. If I recall correctly if you have a few hundred people your cost per person will be less then your cost for a person's time plus the IRS search and so forth.

I forgot to mention they have a cheaper service that does NOT meet the full DOL rules and they do publish those prices. The full service is MORE then this.

http://pbinfo.com/PBISales/Address%20Searc...tro%20Sheet.pdf

But once again if you want to have a service that at the end meets the DOL's rules for a search you have to use the more expensive service.

Since your interested I used them in the early 2000s for a plan that had hundreds of lost people. They would just send us a spreadsheet every month with confirmed found addresses, we used the spreadsheets to mail merge the new address into the distribution forms. Well worth the money in my opinion.

[cdavis25]

Tks for the responses everyone. We were looking at the PB Info company as well. Someone else recommended them.

[Kyle McDonald (PBI)]

Hi everyone,

My name is Kyle McDonald and I am the Sales & Marketing Director at Pension Benefit Information (www.pbinfo.com). Our company offers an entire suite of address location services from compliance-based solutions where we perform a "diligent search" as outlined by the PBGC, DOL, and IRS to online instant address searches where you can get a complete address history including phone numbers in seconds!

If anyone has any questions or would like to request a quote for our services, please call 415-482-9611 or email inquiry@pbinfo.com.

-Kyle

Kyle McDonald

Director, Sales & Marketing

Pension Benefit Information

Ph: (415) 482-9611 x 204

Fx: (415) 482-9300

kylem@pbinfo.com