If a search for a missing participant finds a new address, what do you do with it?

In a BenefitsLink discussion yesterday, neighbors asked which service others like to search for a participant with an inoperable address.

If a search result includes what the search suggests now is a likely current address (postal or email, or even both) for the individual, what does a plan administrator or its service provider do with that information?

(Assume an account not yet nearing a § 401(a)(9) required beginning date and not subject to a small-balance involuntary distribution.)

Whether the found address is postal or email, an administrator might be reluctant to send a written communication there, fearing that a person other than the participant might receive the communication. That would invade the participant’s privacy. And a shrewd person might see that the retirement plan lacks enough control about the participant’s identity to detect a false claim.

Could efforts to find an inoperable-address participant help an impostor steal the participant’s account?

Are there ways of communicating to the found address without revealing anything about the name or identity of the retirement plan? Or might the communication omit the participant's name? If so, would either such a communication, if it reaches the participant, be effective in getting a response from the participant?

What steps would a plan’s administrator use to guard against a theft of an inoperable-address participant’s account?

@Peter Gulia your question highlights what many do not consider when hiring a search firm or launching a search for good addresses and for missing participants.  A participant with a bad address or who is missing is still a participant with an interest in the plan.  Plan fiduciaries are charged with acting in the interests of participants, and plan fiduciaries should have an understanding about the steps to be taken once an address or a missing participant is "found".  I use quotes because, while the initial search results often are successful, a significant percentage of the initial search results are only the beginning of what can be an involved and tedious process.

Notably, most search firms offer different levels of search services.  The basic search scans publicly accessible databases.  The next level of search scans databases where the search firm has privileges to access the data (and commonly the search must pass a level of scrutiny that they have adequate security in place for managing the search results and have made representations about how the search firm will use the data).  The results are communicated to the plan sponsor or a plan service provider.

Many of the search firms offer a service where they will send a generic letter to the individual's address that the search has found and provide information in that letter about who the individual should contact.  This contact may be someone at the client, or possibly someone at a service provider for the plan (for a fee).  If the individual initiates contact, the client or service provider should have sufficient information about the participant to be able to validate the contact.

The plan fiduciaries should be mindful that the search firms are service providers to the plan.  If the plan contracts with the search firm directly, then the plan should have service agreements in place that cover the scope of services and fees.  Given that the expenses of resolving a bad address or finding a missing participant may be disproportionately greater than the value of the participant's benefit of the plan, some plan fiduciaries set parameters for adjusting the level of search services for different groups of participants.  

That being said, what happens next when these initial efforts do not reestablish contact with a participant and there is reason to continue to pursue the effort, often leads to much more complicated scenarios.  For example, the search may reveal that the participant:

• is deceased and may or may not have designated beneficiaries,  
• is incarcerated,
• may have legally changed names,
• has moved outside of the US,
• has been declared missing or deceased,

or many other situations that are not limited by any stretch of the imagination.  The larger the plan, the greater the likelihood of these circumstances coming up.  These are topics that can take us far beyond the original post.

Paul I, thank you for widening my thinking.

BenefitsLink neighbors, do you have other observations or thoughts?

The search services I mentioned does have a level of service that does send a letter to them to confirm it is good by letting them know they are being looked for by a plan. 

If an address is found we often times suggest the our client reach out to them to get them paid as it is rarely an employee who is lost.   They will have the best ability to detect if something is amiss as they have background data on the person.  

However, at some point once you think you found someone you get them forms to sign. If a person signs for someone they aren't they did the crime. I get a fiduciary has some responsibility but I have never seen this blow back on a client who  has used a reasonable process.  The fiduciary obligation don't require them to be mind readers after all. 

We also use a generic letter that does not disclose the reason for the inquiry, and simply requests that they contact us. If they do so, we use multiple identifiers to confirm. We also use PBI.

My QDRO Alternate Payee clients will move to a new home, or remarry and take a new spouse's surname, and they will notify the Social Security Administrations, Motor Vehicle Administration, their Post Office, credit card companies, banks, everyone they know EXCEPT the Plan Administrator of the defined benefit Plan from which they are hoping to someday receive a share of their former spouse's retirement and survivor annuity benefit.  

I have for years included in all of my QDROs the current addresses of both parties, their personal phone numbers, and their personal email addresses.  My motive is to give the Plan Administrators a second and third shot at finding the parties at significant events such as retirement and death. 

You administrator folks should insist upon it. 

David 

DSG, do you include telephone numbers and email addresses in the court’s order?

Or, do you put that sensitive information in some kind of supplement for the plan’s administrator, but not on the court’s public record?

@Peter Gulia  Peter, I almost always put full contact data (address, voice number, email) in the signature blocks of stipulated QDROs, in addition to the addresses given earlier in an order, and I provide them again in cover letters to plans when I send all certified orders to them. Because most all QDROs are sealed orders here in Washington, they're not on the court’s public record. In cases in which a protection order is in place (sadly there are more and more of them), I leave the protected party's address and other contact data out of an order and give PAs full contact information for the protected party in the cover letter alongside the admonitions to not disclose the protected party's data. Like David, I always advise parties to stay in contact with PAs as well.

If there is a QDRO on file, a PA can also contact the attorney who wrote a QDRO to ask for updated contact information. Most attorneys will keep client files for six years, sometimes longer, depending on the circumstances.