Missing participants for whom automatic rollovers were done

[Pension RC]

I am completing the PBGC Schedule 501 for a Defined Benefit plan that has terminated. During the distribution process, we performed a diligent search for 19 missing participants whose lump sums were less than $5,000 and then automatically rolled over the money to Millennium Trust, providing them with the participant information, etc. Do I answer "No" to question 5 on Form 501 ("Were you able to locate all participants and beneficiaries?") If so, would I need to complete a Schedule MP for them? I don't know how I would do that, as the Schedule MP seems to assume that you either purchased annuities or are transferring the money to the PBGC.

Any help would be appreciated.

Thanks!

[ETA Consulting LLC]

Under the auto rollover rules, rolling over to an IRA is "virtually" the equivalent of the participant making an election; that's the point of auto rollover. So, you don't know that they are missing. You paid them out under the forceout rules after the failed to respond.

That would be my initial take.

Good Luck!

[Mike Preston]

This is one of those unfortunate circumstances where the PBGC has been inconsistent in their handling. Very unusual for the PBGC because they are typically very consistent.

Some people I've talked to say exactly what ERISAToolkit said and if you follow that reasoning you would answer the question yes, you have found everybody.

Others have said that the autorollover provisions of a plan are overruled by the Missing Participant regulations. For amounts under $5,000 though, the amount that is autorolled is the exact same amount that is sent to the PBGC. This gets messy, though, because if the PBGC doesn't accept the autorollover you either have to get it back from wherever it was rolled to or double pay. Neither is really acceptable.

The point in time to deal with this would have been when the Form 500 was filed and assigned. Calling that person at the PBGC and then following that person's lead would have been the safest course.

I would still call the person it was assigned to and see if you can't get him or her to adopt ERISAToolkit's point of view.