Updates to Pre-Approved DC Plans

‍

Plan sponsors often overlook obligations to terminated vested employees. Maintaining accurate contact information for these individuals is crucial to provide them with their benefits.

Key Responsibilities

  1. Annual Notices: Ensure terminated vested participants receive all required annual notices.
  2. Pension Plans: Notify participants nearing retirement age about their eligibility and required minimum distributions (RMDs).
  3. 401(k) Plans: Inform participants with plan balances about RMD requirements.

Managing Missing Participants

Participants may become “missing” if they fail to update their contact information or are unresponsive. SECURE 2.0 allows plan sponsors to roll small balances, up to $7,000, into an IRA. It also supports automatic portability for moving small accounts to new employers’ plans.

Best Practices for Keeping Participants Connected

  1. Regular Updates: Contact participants periodically to confirm or update their contact information.
  2. Communication: Include requests for contact updates in plan communications and flag undeliverable mail for follow-up.
  3. Online Platforms: Provide an online platform for participants to update their contact information.
  4. Prompts: Use login prompts to confirm contact information.
  5. Onboarding and Exit Processes: Ensure new hires and exiting employees update their contact information and understand the importance of keeping it current.

Steps if Participants Are Missing

  1. Check Records: Review plan and employer records for updated contact information.
  2. Contact Beneficiaries: Reach out to designated beneficiaries and emergency contacts.
  3. Online Searches: Utilize online search engines, public records, and social media.
  4. Commercial Services: Employ commercial locator services or credit-reporting agencies.
  5. Certified Mail: Attempt contact via certified mail or private delivery services.
  6. Colleague Outreach: Ask colleagues or use the company intranet to locate missing participants.
  7. Pension Registries: Register missing participants on public and private pension registries.

Maintaining contact with plan participants is vital for compliance. Avoid letting a few missing participants lead to larger issues. For assistance with participant census information or managing terminated vested participants, contact our Employee Benefits group.

Learn more about retirement plan noticing with Plan Notice

‍

OverviewBenefitsProcessAboutContactPrivacySecurityTerms
© Plan Notice