Death Verification

[Guest llwallace]

How do Plan Administrators verify that former participants are still living? We recently discovered a death benefit was not paid timely because we did not know the former employee was deceased.

[GMK]

I do not know of a fool-proof (which would be good for me) way to verify this. If someone does, please post.

We send a mailing at least once a year to former employees who are still participants, regarding distribution options, fund line-up changes, fee notices, etc., as applicable. If the letter comes back undeliverable, we google for evidence of whether or not the person is still alive, send an e-mail and/or call to try to contact the person, and like that. Haven't had to go beyond that, so far.

[ESOP Guy]

Unless you plan running every participant's SSN you have on file against the Social Security's death database I am not sure how you find this out.

This one of the reasons I stress with my clients to not allow "lost" participants linger. As soon as you get mail returned start a search for them or their beneficiary. Even in that case if mailed information didn't get returned nothing would have tipped you off.

[John Feldt ERPA CPC QPA]

And the Social Security database is not always accurate. We found that sometimes the oldest retirees had problems with their SSN and their spouse's SSN being mixed up, meaning a participant or beneficiary calls in to the SSA to report the death of their spouse, but the SSA database was marked to show the caller as deceased instead. This also might have to do with the fact that some of the oldest SSA recipient's spouses were not issued social security numbers when social security payments started.

One of the larger (17,000+ participants) plans that we worked with had us use PBI for all deferred vested participants, retirees in pay status, surivivors in pay status, and the designated surivivors for all J&S chosen forms of payment. This may be more that you would need to check for your plan, but this plan had a joint and reversionary option where the J&S benefits increase to a higher level after the death of the designated spouse (if they died first).

We received a quarterly report. http://web.pbinfo.com/

We also did not always trust that report either, but it was very useful and provided good details. Regardless, we were careful on how the letters to participants were crafted if they that showed up in the reports. We were not just immediately stopping payments simply because they showed up on the report.

[ESOP Guy]

For what it is worth I have used PBI to find lost participants in DC plans and have had liked the results every time.