On the Horizon: Expanded PBGC Missing Participant Program
Contributed by Joanne Szupka
Sponsors of terminated or potentially terminating defined contribution and defined benefit plans will be interested to know that the Pension Benefit Guaranty Corporation (PBGC) is looking to expand its Missing Participant Program to cover terminated 401(k) and other defined contribution plans as well as certain defined benefit plans not currently covered by the PBGC program. PBGC anticipates having the expanded program available in 2018 for plans that terminate after 2017.
One option previously available to plan sponsors was the IRS Letter Forwarding Program that was terminated in August 2012. The lack of a central database of missing defined contribution participants for terminated plans makes it difficult for participants to locate their accounts. Plan sponsors attempting to meet their fiduciary responsibilities to terminated plan participants currently have only had the guidance in the DOL’s Field Assistance Bulletin No. 2014-01 to follow. Once implemented, PBGC’s expanded program (which would be voluntary for defined contribution plans) is expected to simplify locating retirement benefits for participants of terminated plans and to assist plan fiduciaries in complying with their responsibilities relative to plan terminations.
This article originally appeared in BDO USA, LLP’s “EBP Commentator” blog (Fall 2016). Copyright © 2016 BDO USA, LLP. All rights reserved. www.bdo.com