Lost participants

We have a plan that missed providing deferral opportunities for quite a few employees over the years.  They are going to go back and make good on calculating and depositing what is required for these individuals.  However, several individuals have left the company years ago and they may not be able to locate them on their own.  Any recommendations on a public or private services that can be used to search for lost participants?  

Thank you

Some retirement plans’ fiduciaries prefer to integrate searches with the service provider one selects for default rollovers to Individual Retirement Accounts.

If the plan lacks such a service provider, consider looking first to service providers that advertise with BenefitsLink.

PBI has worked well for us.  They can almost always tell you the participant's current address and they even have a "relative search" function that is helpful if the person is deceased.

On 11/23/2022 at 3:38 PM, EPCRSGuru said:

PBI has worked well for us.  They can almost always tell you the participant's current address and they even have a "relative search" function that is helpful if the person is deceased.

Another vote for PBI.  

Thank you; I will look into PBI.

A related question:  If the plan sponsor does not have an address for a former participant and if PBI cannot assist, can the plan sponsor send the balance directly to the state as unclaimed property or in this type of situation, does it still have to first go to a plan account before passing this on to the state?

Wasn't that option officially kiboshed a few years ago, with a default IRA the alternative?

Most plan documents have a provision saying what to do with lost participant accounts.  

The problem that the plan sponsor has pertains to the confidentiality of providing individual SS#s to the mutual fund company/recordkeeper without the consent of the individual, in order to set up a default account for them.  That they could run into legal problems by doing this.  

Depends on what the Plan Document states, but another option is forfeiting the account balance. However, if the lost participant (or their rightful beneficiary) ever resurfaces, the Plan Sponsor must restore the account balance (without earnings). Our document (ftwilliam.com) permits forfeiture of missing participant accounts after reasonable efforts to contact the Participant have failed.

That is interesting, but do those amounts stay in forfeiture or once in forfeiture, they can be used to offset future contributions?

Also, if the plan terminates, can those amounts  be used to offset employer contributions or pay expenses?

Thank you

12 minutes ago, Santo Gold said:

That is interesting, but do those amounts stay in forfeiture or once in forfeiture, they can be used to offset future contributions?

Also, if the plan terminates, can those amounts  be used to offset employer contributions or pay expenses?

Thank you

The plan document will tell you how the forfeitures will be used.