Does a plan sponsor have a fiduciary duty to notify, and send distribu

[Guest Gibson]

Does a plan sponsor have a fiduciary duty to notify, and send distribution election forms to, a terminated employee that he is entitled to a distribution under the terms of the Plan? We have an employee who termninated employment over a year ago. He is 51 years old. He has not appraoched us about getting his money out of the Plan and we have not notified him that he is currently entitled to a distribution. What should we do? Thanks.

[MR]

I guess my question is - why would you NOT notify him. Whether now or at some future date, he or his beneficiary will receive the distribution, so why not get it over with now, while you still know where he lives. Imagine in 20 years, he dies and you're contacted by his three ex-wives and his 11 children, all claiming rights to his fortune. Meanwhile, you've lost his beneficiary form. My advice - pay him now, while its easy.

[david rigby]

I'm not sure whether it comes under "fiducuary duty", but the plan (or administrator or sponsor) must notify any participant who has a vested benefit, assuming this is an ERISA-covered qualified plan. In addition, the participant should be reported on the Schedule SSA (attachment to the 5500), unless already paid out by the due date of the 5500.