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Finding Missing Participants

SITUATION: We need to locate several plan participants who have terminated employment to begin making required minimum distributions to them. In the past, we used the IRS’s or Social Security Administration’s (SSA’s) letter-forwarding services to find participants who may have moved without notifying us. But I’ve read that both the IRS and the SSA have discontinued their letter-forwarding services.

QUESTION: How can we locate missing participants without these services?

ANSWER: There are alternative methods for locating participants and beneficiaries your plan can consider using. In addition, you may want to consider various steps that could help minimize the number of participants and beneficiaries who cannot be located.

DISCUSSION: The IRS stopped its letter-forwarding program in 2012, and the SSA ended its letter-forwarding service earlier this year. Both the IRS and the SSA cited the availability of the Internet and other locator services as one of the reasons for suspending their programs.

In lieu of letter forwarding, the IRS suggests plan sponsors use one or more of a variety of other methods to find missing participants, including commercial locator services, credit reporting agencies, and Internet search tools.

Internet search tools are simple and often free to use. Keep in mind, however, they may not satisfy an auditor as “reasonable actions” if you fail to find a participant or beneficiary. You may want the protection provided by using a commercial locator service.

Maintaining regular contact with plan participants, both before and after employment ends, can help reduce the number of participants who can’t be located. Having various types of contact information on file (mailing addresses, e-mail addresses, phone numbers, etc.) and encouraging participants to keep their contact information up to date can also help.

If the contact information your retirement plan has on file is not current, consider checking the records of other benefit plans you may sponsor for more current information. Or see if you can get in touch with the missing participant’s designated beneficiary to secure updated contact information for the participant. The DOL suggested both of these steps in its guidance related to locating missing participants of a terminated plan.


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