Tag Archives: missing participants

Make Sure You Take Sufficient Steps to Find Missing Participants

One more reason why discount 401k plan administrators are often not enough… Preferred TPA’s automatically roll your missing participants out according to the rules…

“When searching social media sites, it may be necessary to follow the trail to the missing participant’s family and friends, known affinity groups or professional organizations, as well as any book, sporting, and retirement clubs the missing participant may have connected with…. Work with the company’s legal department to subscribe to a robust public records database to assist in finding missing participants, their family members, and friends. Such lists may include telephone numbers…. Piggyback on the investigative tools and contracted resources already established by the company’s security team and fraud department.” – DOL Guideline when terminating a plan

Do you have missing participants in your 401K?

As employees terminate, they typically leave their balances with the prior employer.  In these cases, they are still participants – meaning you still pay to administer their account, and you have an obligation to communicate with them as much as any active employee.   This is not a problem, until you lose track of the ex-employee.  While it is not your Fault, it is still your responsibility under the law.

50% of Millenials in a recent survey learned of a retirement account with a previous employer they didn’t realize they had.

Enter the “Missing Participant IRA.”  The best solution is to get the ex-employee to take their balance with them when they leave.  Since that doesn’t always work, you need a mechanism to handle this.  With some of our clients we use a third-party outside service, but more and more high-end TPAs are providing this service automatically.

 

If you are concerned about COMPLIANCE in your 401k just give us a call.

September 2018
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Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA.
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