Unique ACA issue and participants personal info

[Lori H]

A participant in a 401(k) that has automatic enrollment was enrolled in the plan and subsequently opted out. The participant is now upset that the service provider has access to his personal info (address, SSN, etc). Opting out does not erase/delete the employee's personal information from the roll. Do you know where I can find information on this topic of protecting personally identifiable information? Is this a privacy issue? Has anyone had experience with this?

The service provider will need this info to process distributions, 1099's, 8955's, etc when a distributable event occurs. Do participants have any recourse with privacy issues?

Thanks

[Lou S.]

I would think the participant would only have recourse if the service provider misuses the data.

[My 2 cents]

They know who you are and where you live! Get used to it!

If any amounts were contributed to the plan before the person opted out, the person is a plan participant until paid out, and reporting the information to the government when they are paid out (with Social Security Number) cannot be avoided. Access to such information is acceptable when on a need to know basis, and, without question, those servicing the 401(k) plan have the need to know.

[SearchLight]

Participants can (and often do) argue almost anything they want under the idea that's a breach of fiduciary duty. Here, I guess the logic would be that giving PII to a third party is imprudent, even if the sponsor's obligated to do so by the terms of the service agreement.

Beyond that, the options for recourse are probably limited to whatever's available under state/federal privacy law. That's probably not a lot, though, given that the actual service agreement is between the sponsor and the provider rather than the participant and the provider.