Lost participants and sending SPD, SAR, etc...

I know there are proscribed steps to find lost participants before you can shuffle their benefit to an IRA.

However, is there such a rubric for when participants cannot be located when they have to be sent an SAR, SPD or SMM?

For example, plan is adding installment payments as a distribution option.  An SMM is prepared and mailed to all affected participants.  That will include any former employees with a balance in the plan.

What happens if some of the SMMs to former EEs come back as undeliverable?  Obviously, the SAR will come back, too.  Are there rules similar to the ones for the forced distributions?

If so, does anyone ever really take those steps?

There have been DOL FABs for handling missing participants in terminating plans (which ongoing plans look to by analogy), and earlier this year the DOL issued guidance on best practices applicable to ongoing plans. If mail is returned as undeliverable, you should take steps to locate the participants with that guidance in mind.  The bigger issue comes down the road when RMDs must be paid and a P can't be located, so if you have notice early on of a bad address, it's a good idea to try and find them sooner rather than later. The IRS also suggests similar search steps to the DOL's (e.g., see its 2017 directive and EPCRS search steps). 

If a plan’s administration uses an implied-assent electronic disclosure regime based on 29 C.F.R. § 2520.104b-31, an administrator must design its system to detect an inoperable electronic address, whether an email address or a smartphone number.  If there is a bounce-back and the administrator does not promptly cure it or replace it with another electronic address, one must treat the individual as if she opted out (and turn on paper delivery).

https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-C/part-2520/section-2520.104b-31

What if the snail-mail comes back as undeliverable?

Does the Plan Administrator have to follow the lost participant rubric to get them SPDs and SARs?

Does anyone really do that?

Side note:  what about participant statements?  They must be furnished with at least one per year.  I know some custodians will just turn off mailing the statement if it comes back as undeliverable.  Should it not fall to the plan administrator to try and find these people?

Retirement plans’ fiduciaries and service providers have a wide range of responses to these situations.

Yes, some have procedures for yearly and quarterly improvements in participants’ contact information.

Some methods vary with the plan’s size, bargaining power, a fiduciary’s (or its lawyer’s or consultant’s) negotiating savvy, and a service provider’s business interests.

The challenges are hardest when a plan lacks bargaining power to get anything beyond its recordkeeper’s standard service.  It might help if recordkeepers build a standard service, available for extra fees, with those fees allocated to participants’ accounts.

Like so much of what we do with retirement plans, a fiduciary can oversee a procedure but wants to make the work a contracted service function.