PBGC termination, missing participants with small account balances

[Jakyasar]

Hi

I have not had an experience with low balances for many years and just want to confirm my findings.

Checking a PBGC termination for a CB plan - official termination date is late August 2026.. There are a few participants missing but their balances are less than 7k. Some are as low as $500

Plan just got amended to increase the force-out to 7k.

If the participants cannot be located, PBGC will take over their balances as lump sum since no annuities, correct?

Instead of PBGC taking over, can the balances be transferred to an IRA thru a company like Penchecks? If yes, is this subject to PBGC approval?

Thank you

[Calavera]

No, you cannot transfer these benefits to an IRA. Sending them to PBGC probably will be cheaper than going through an annuity purchase process. 

[Marjorie Lucas]

Have you tried LexisNexis in an attempt to locate the participants before sending them to PBGC?  You may also use these other tools if needed.

• TLOxp (TransUnion)
• Tracers
• idiCORE (IDI Data)
• Experian Search Services

[CuseFan]

If under the terms of the plan and prior to the termination (maybe too late now if process started/NOITs issued) you could do auto rollover as a function of normal plan administration then I think it would be permissible.

[Jakyasar]

44 minutes ago, Marjorie Lucas said:

Have you tried LexisNexis in an attempt to locate the participants before sending them to PBGC?  You may also use these other tools if needed.

• TLOxp (TransUnion)
• Tracers
• idiCORE (IDI Data)
• Experian Search Services

Thank you for the list, always good to know more

[Jakyasar]

41 minutes ago, CuseFan said:

If under the terms of the plan and prior to the termination (maybe too late now if process started/NOITs issued) you could do auto rollover as a function of normal plan administration then I think it would be permissible.

NOIT already done

[Jakyasar]

Just attended the ASEA PBGC webinar and the answer to my question, unless you payout before even thinking about terminating the plan, no payout can be made and all those $500 benefits must go thru the PBGC termination process.