Terminating plan/lost participants/rollovers

[Chippy]

I have a terminating plan with 4 remaining participants, none of which can be located.     The recordkeeper will not set up an IRA for them without a address.    Can anyone recommend a rollover company that these participants balances can be put into and the plan closed?   It's 4 participants and $361 total between the four.   Each participant has less than $100.    Any other suggestions on how to get this plan closed?  

[ERISAAPPLE]

I have always liked Millenium Trust.  This is just my personal opinion, and should not be considered advice or a recommendation, and certainly not for a fee.  You, the plan, the plan's fiduciaries, plan's agents, and plan participants, and anyone else who may be interested or even if they are not interested may not rely on my opinion and should seek advice from a competent professional.   The communication of my opinion does not create an attorney/client relationship, etc., etc.  

[Lou S.]

I believe Pencheck, Millenium Trust, Nationwide and several other provider all setup rollover IRAs for lost participants. Call around and find one you like that will take a missing participant without an address.

You can also look into the PBGC missing participant program which was recently expanded to cover terminating DC Plans.

 

[duckthing]

Millennium Trust can also do an address search for missing participants for you and the results we've gotten from them have been good -- I've only had a few people over the last year or two that they could not provide updated results for. I'm sure others provide something similar but Millennium is the only one I'm familiar with. (However, I don't know offhand if they will balk at opening IRAs for balances that low.)

[chc93]

We have seen recent plan documents that provide for forfeiture of terminated participant accounts provided that (1) reasonable efforts were made to find the lost participant, (2) the account is less than $1,000, (3) search effort for at least 12 months, and (4) if the participant subsequently makes a claim, the plan administrator will reinstate the account.  For a plan termination, I would guess this means that the plan administrator would pay the participant from company funds.  I don't know what would be done if there is no company left.  But for less than $100 for each of 4 participants, I would think forfeiting back to the company is reasonable in this case of plan termination.

[Patricia Neal Jensen]

We use Millennium and Paychecks.  I would get that obligation out of the plan and therefore not use chc93's technique.

[ERISAAPPLE]

On ‎4‎/‎27‎/‎2018 at 9:15 PM, chc93 said:

But for less than $100 for each of 4 participants, I would think forfeiting back to the company is reasonable in this case of plan termination.

There is no such thing as a forfeiture back to the company.  

[chc93]

40 minutes ago, ERISAAPPLE said:

There is no such thing as a forfeiture back to the company.  

Yes, I agree.  But for less than $100, it seems like transferring to an outside trust company is "overkill".  I guess I'm too simple (comes with age).

[Chippy]

I'm torn to suggest forfeiting because of the small amounts.      The IRA's if set up will go to zero in a few years due to fees, so in the end the participants probably won't get any money anyway.    This has been dragging on for a few years trying to locate the participants.    

[chc93]

Another thought.  Can those $361 account balances be forfeited in the plan and pay for administrative fees... again, with knowledge that if the participant comes forward, the company is obligated to pay the forfeited balance.

[ERISAAPPLE]

chc93, if the plan provides for such a forfeiture, and the plan has an IRS letter, go for it.  

16 hours ago, chc93 said:

Another thought.  Can those $361 account balances be forfeited in the plan and pay for administrative fees... again, with knowledge that if the participant comes forward, the company is obligated to pay the forfeited balance.

 

[chc93]

We actually have plan documents for plans in our office with that provision and an IRS DL.  My initial comment on "forfeiting back to the company" was really was along these lines of forfeiting in the plan, and have the plan pay fees from forfeitures.

Thanks...