Finding Missing Retirement Participants

‍

Plan sponsors often lose contact with terminated vested employees, leading to complications in distributing earned benefits. Ensuring accurate participant information is critical to maintaining compliance and smooth plan administration.

Key Responsibilities for Plan Sponsors

1. Annual Notices: Send required notices to all terminated participants promptly.
2. Pension Plans: Notify eligible participants about retirement options, including required minimum distributions (RMDs).
3. 401(k) Plans: Inform participants with balances about RMD requirements and available withdrawal options.

Addressing "Missing" Participants

Participants may become unreachable if they fail to update contact information or ignore outreach efforts. The SECURE 2.0 Act provides helpful tools:

• Small Balance Rollovers: Plan sponsors can move balances under $7,000 into IRAs to manage inactive accounts.
• Automatic Portability: Automatically transfers small accounts to participants' new employer plans, reducing orphan accounts.

How to Maintain Participant Engagement

Regular communication is crucial to keeping participants connected. Incorporate reminders in plan notices, and use online tools or login prompts to make updating contact information simple. Include these steps during onboarding and exit processes to ensure long-term engagement, even after employees leave the organization.

Steps to Take if Participants Are Unresponsive

If participants remain unreachable despite initial outreach, review employer records, contact listed beneficiaries, or use public databases and locator services to track them down. Certified mail or private delivery options can also increase the likelihood of reaching participants.

Maintaining participant connections benefits both the plan and participants, ensuring timely distributions and better retirement outcomes. For more support with managing missing participants, contact us today.

‍