Pooled Plan / Lost Participant / $800 Balance

[austin3515]

Plan is pooled, and an exhaustive search for someone turned up nothing.  Balance is $800.  PenChecks (bless them) is willing to take IRA forceouts as low as $50 I am told (the small balance would of course be wiped out by fees soon thereafter).

Are people doing this?  It seems like a practical solution to me, but obviously that makes no difference at all!

What are poeple doing? Carrying these people on the books until they can be forfeited (in my pre-approved doc I can't do this until NRA!).  Is there a way around this?

[RatherBeGolfing]

I don't see any other way around it, especially with the DOL scrutinizing attempts (or lack thereof) to locate missing participants.  

[ESOP Guy]

We send force outs of this size to the various companies that set up roll overs for such people. 

Shocked the document is that restrictive to forfeit lost participants. 

[austin3515]

I would be curious to know if your document says the same thing as mine.  I thought the IRS made them put this ridiclous language in there.

[ESOP Guy]

ESOP are always attorney drafted and most say you can forfeit after a diligent search that determines they are actually lost.  Back when you could get D Letters they always got D Letters with that language. 

[Kevin C]

Almost all of our clients' plans have a $5,000 cashout provision that would apply before you could get to the point where a provision to forfeit the balance of a missing participant would apply.  The only small balances that do not get auto rolled are those small enough that they would be completely eaten by fees when the funds arrive at the IRA provider. Those get forfeited if the participant can not be located.

[KD]

I've used Millennium Trust Company in the past, but only for plans that were terminating. For others, I wait them out and do a paid search every couple years (charged to their account). I've actually found quite a few lost p's on Facebook! It will be interesting to see how DOL's latest comments on the topic will play out.

[ESOP Guy]

50 minutes ago, KD said:

 I've actually found quite a few lost p's on Facebook!

it is interesting to see how the internet has made making being a little creative work.  We recently found a beneficiary be searching out the obituary from the small town paper where the participant lived.  We got the name of the church where the services were held.  We called the church told them the basic idea of who the plan was and asked if the participant had any family in town.  The pastor knew of the family and helped them get in contact of the plan.  We worked out who ought to be paid the around $60 at very little cost.  Just the time of a quick internet search and a couple of phone calls.