The guidance provides DOL's views on what is "best practices" in searching for missing participants and a glimpse into DOL's enforcement process under its missing participant initiative. The study, Improving the Effectiveness of Electronic Missing Participant Searches, comes on the heels of Department of Labor (DOL) guidance on the topic and is highly-useful for plan sponsors who utilize electronic searches, or "e-Searches" as they are . Overviews of the DOL's three new pieces of guidance: State upfront and prominently what correspondence is about, and make it identifiable to participants. The DOL recently issued three pieces of guidance on cybersecurity best practices for employee benefit plan sponsors, fiduciaries, recordkeepers, participants and beneficiaries: (1) Tips for Hiring a Service Provider With Strong Cybersecurity Practices, (2) Cybersecurity Program Best Practices, and (3) Online Security Tips.This is the first time the DOL has issued comprehensive guidance . In this article, we'll help you sort through the Best Practices to . Best Practices Being Proactive The DOL states in the publication that the following "best practices" are effective at minimizing and mitigating the problem of missing or nonresponsive participants: Maintaining accurate census information for the plan's participant population. Here are the . Let's take a quick tour of what was included. DOL best practices for missing participants and pension plans: DOL best practices for missing . According to DOL FAB 2004-02, plan fiduciaries are responsible for locating missing participants and providing them with options to distribute their benefits. OCTOBER 28, 2021. DOL explains that the following are red flags, indicating plans may have a problem: More than a small number of missing or nonresponsive participants. Maintaining accurate census information for the plan's participant population by: Contacting participants and beneficiaries on a periodic basis to confirm or update their contact information; In January 2021, the U.S. Department of Labor (DOL) issued best practices for missing participants to help fiduciaries of defined benefit and defined contribution plans, such as 401 (k) plans, weigh which practices could help minimize the numbers of missing participants and uncashed checks. Field Assistance Bulletin 2021-01. The new guidance has three components. In January 2021, the U.S. Department of Labor (DOL) issued best practices for missing participants to help fiduciaries of defined benefit and . Up until earlier this year, it wasn't just the participants who were missingthe guidance was missing, too. This is perhaps the most informative piece of guidance of the three as it provides a number of practical, helpful red flags to watch out for and "best practices" for dealing with the various flavors of missing participants. More than a small number of terminated vested. FAB 2020-01 Best Practices The DOL has issued more guidance on missing participants, including a temporary enforcement policy on use of the PBGC's expanded Missing Participants Program (PBGC Program) and informal guidance on best practices for dealing with missing and unresponsive participants. For one, they have to. These are applicable to both defined benefit and defined contribution plans. Goldberg echoes the fact that the DOL guidance "gets pretty granular about what it considers to be best practices." DOL explains that the following are red flags, indicating plans may have a problem: More than a small number of missing or nonresponsive participants. 1 Maintaining accurate census information for the plan's participant population. The Department of Labor issued long-awaited guidance on missing retirement plan participants Tuesday evening, calling it part of its effort to help plan fiduciaries meet their obligations under ERISA to locate and distribute retirement benefits to missing or non-responsive participants. The DOL noted that these practices may not all be appropriate for each plan, but plan sponsors should review and implement changes where appropriate. For whatever reason, the cannot be located to deliver withdrawal paperwork or cash-out checks. The first is Field Assistance Bulletin (FAB) 2021-01 . On Jan. 6, Retirement Clearinghouse (RCH) released a study that advances the art and science of locating missing 401k plan participants. While numerous DOL audits have centered on this issue, and the DOL has issued guidance on fiduciary duties and missing participants in terminating defined contribution plans (e.g., FAB 2014-01 . . Unfortunately, not every Best Practice will be appropriate for every plan. Securities Exchange Commission (SEC) 17 CFR 240.17Ad-17: SEC 17 CFR 240.17Ad-17 is a regulation outlining search efforts that broker-dealers and transfer agents should conduct if they maintain accounts of missing or lost accountholders. They include: More than a "small number" of missing participants; More than a "small number" of terminated participants who have reached retirement age but have not yet started receiving . The first describes "red flags" that signify a plan fiduciary might have issues with Missing Participants and sets forth the DOL's suggested best practices to remedy the issues. Plans with low numbers of missing and nonresponsive participants and beneficiaries frequently use best practices that include: Updating census files to ensure that plans have accurate information for all participants and beneficiaries Implementing effective communications programs Strengthening missing participant searches The DOL's guidance, issued January 12, 2021, includes a host of best practices (the "Best Practices") plan sponsors and other fiduciaries can use to locate missing or nonresponsive participants. The guidance included three parts. Elizabeth Goldberg and Lindsay Ja. The DOL noted that not all of its suggested practices to locate missing participants are appropriate for every plan, and plan fiduciaries should consider what practices would yield the best results taking into account the participant population, the size of a particular participant's account balance, and the cost of search efforts. May 21, 2021. Based on EBSA's experience working with plans, the following practices have proven effective at minimizing and mitigating the problem of missing or nonresponsive participants. "If at first you don't succeed, try, try again.". March 19, 2021. Participating plans can either transfer all missing participants' accounts to PBGC or none of them. The guidance provides DOL's views on what is "best practices" in searching for missing participants and a glimpse into DOL's enforcement process under its missing participant initiative. Recently issued Department of Labor guidance is an important step toward resolving the "missing participants" problem. Best Practices for Pension Plans describes a range of best practices fiduciaries of retirement plans, such as 401 (k) plans, should consider as steps their plan could take to help reduce missing participant issues and ensure that plan participants receive promised benefits when they reach retirement age; 2021-01. The Department of Labor unveiled three pieces of guidance late Tuesday related to missing participants. He says the DOL's recent guidance on missing participants also provided details about processes. " Best Practices for Pension Plans " describes a range of best practices fiduciaries of retirement plans, including defined contribution (DC) plans, should consider as steps their plan could take to help reduce missing participant issues and ensure that plan participants receive promised benefits when they reach retirement age. In 2013, the council recommended that the DOL develop best practices for finding missing participants, and, in 2014, the DOL issued a Field Assistance Bulletin stating that, "consistent with their obligations of prudence and loyalty, plan fiduciaries must make reasonable efforts to locate missing participants or beneficiaries." Compliance Assistance Release 2021-01 . Missing Participants Guidance. based on its experience in investigating plan sponsors, dol identified the following "red flags" that are often warnings or indicators of a problem with missing or nonresponsive participants: (1). The Department also stresses that ERISA's fiduciary obligations fully apply to missing participants whose accounts the plan purports to treat as "conditionally forfeited" under Treasury Regulation 1.411(a)-4(b)(6). This document identifies red flags that might indicate that a plan has a problem with missing participants. 1. The first outlined a range of best practices retirement plan fiduciaries should consider to. The guidance is in three forms: Best Practices for Pension . A page titled "Missing Participants - Best Practices for Pension Plans" describes a range of best practices for fiduciaries of retirement plans to consider. Unlike the DOL, the IRS's Oct. 19, 2017, administrative enforcement guidance does not require that a retirement plan's administrator identify and . Missing Participants - Best Practices for Pension Plans DOL's "best practices" document outlines its view of the "best practices that the fiduciaries of defined benefit and defined contribution plans, such as 401 (k) plans, can follow to ensure that plan participants and beneficiaries receive promised benefits when they reach retirement age." However, the guidance does not establish the type of clear, bright-line rules many plan sponsors and services providers were asking for. Best Practices for Preventing and Locating Missing Participants. Note that our standard services do not incorporate all the best practices set forth in the DOL guidance, so please consider additional measures to minimize missing participants and outstanding checks - including adding our enhanced missing participant offering through Fidelity Workplace Consulting. The Fundamentals of Locating Missing Participants The Definitive Guide to Missing Participants The definitive guide to the problem of missing participants in 401(k) and 401(k)-like plans, providing answers to key questions, as well as information and links to explore the many aspects of this important issue. best practice tips apply equally to both types of plans. " Best Practices for Pension Plans " describes a range of best practices fiduciaries of retirement plans, including defined contribution (DC) plans, should consider as steps their plan could take to help reduce missing participant issues and ensure that plan participants receive promised benefits when they reach retirement age. The DOL has issued additional guidance to assist fiduciaries in meeting their obligations to missing participants. Missing ParticipantsBest Practices. Best practices for missing participants The document, titled "Best Practices for Pension Plans," lists the following "red flags" that suggest to the DOL that an employer may have a problem with missing participants: More than a small number of missing or nonresponsive participants; Locating missing retirement plan participants has long been a DOL priority, and is often the focus of plan audits. Join us for a focused discussion of the Department of Labor new guidance on missing participants and its implications for retirement plan fiduciaries and service providers. In January 2021, the Department of Labor (DOL) provided guidance on the issues of missing participants and uncashed checks. That post is available here, and describes the DOL's guidance on Missing Participants - Best Practices for Pension Plans ("Best Practices"). 1. Guidance 1: Missing Participant -Best Practices for Pension Plans Applies to both defined contribution plans, such as 401(k) plans, and defined benefit plans. Deciphering the DOL Best Practices for Missing Participants. The best practices consist of the following: Maintaining accurate census information for the plan's participant population. It may not be the mantra of plan sponsors, but this old adage certainly sums up the Department of Labor's (DOL's) approach to the fiduciary duty of searching for missing plan participants. New DOL guidance on missing plan participants. Best Practices for Missing Plan Participants In January 2021, the Department of Labor (DOL) released new guidance on dealing with missing participants - former employees with a retirement account balance. The new guidance Missing Participants Best Practices for Pension Plans is an informational document that identifies "red flags," including: Not having systems in place to avoid missing participants losing benefits Having structural and search practices that minimize missing-participant violations Consequently, on January 12, 2021, the DOL provided three official documents to provide guidance on how to define a missing participant, how to locate the participant, and how the DOL will audit plans (both Defined Contribution (DC) and DB) moving forward. The second part of the DOL's January 12 . 12:00 PM - 01:00 PM CT. 10:00 AM - 11:00 AM PT. On January 12, 2021, the DOL issued three pieces of guidance on the Missing Participant issue. Although not a regulation, the guidance does provide clarity and direction. Administering retirement plan distributions with respect to missing participants and uncashed checks has been a vexing challenge for plan administrators, particularly because . The U.S. Department of Labor (DOL) has issued guidance on best practices for locating missing participants in defined benefit and defined contribution retirement plans. Following are some highlights. The Search for Missing Participants Continues: DOL Guidelines and Best Practices. On January 18, we published a blog post regarding new Department of Labor ("DOL") guidance on missing plan participants. In late 2017, PBGC overhauled its missing participant program which previously covered only defined benefit (DB) plans to let certain terminating DC plans participate for the first time. The DOL suggests the following practices in communications with participants and beneficiaries: Use plain language and offer non-English assistance, and encourage contact through the plan/plan sponsor website and toll free numbers. Under Title I of ERISA, plan fiduciaries retain full responsibility for Topics Addressed: John Nownes, JD. Missing ParticipantsBest Practices for Pension Plans describes best practices that fiduciaries of defined benefit pension plans or 401(k)-type defined contribution plans can take to ensure that . March 8, 2021. Plan sponsors know the challenges of keeping track of participants, especially those in retirement or who no longer work for the company. By Jane Smith. With a written policy and consistent procedures, a retirement plan can establish best practices to handle the problems that missing participants can create. Compliance Assistance Release No. The DOL's " Missing Participants Best Practices for Pension Plans " describes a range of steps that retirement plan fiduciaries should consider to locate missing or nonresponsive participants. The Retirement Plan Best Practices Release summarizes what the DOL views as "best practices" for retirement plan fiduciaries navigating issues around missing participants, and "red flags" that the DOL views as indicators of retirement plan fiduciaries who have a problem with missing or nonresponsive participants. Plan fiduciaries should determine which practices will be most effective for the plan's specific population. Watch the presentation >> | View the slides >> Tuesday, March 23, 2021: 12:30 PM . As the DOL states in its Best Practices, the first step in addressing any problem is knowing it exists. "Perhaps it is a new approach the DOL is taking when it comes to providing guidance," he says. The DOL recently issued Field Assistance Bulletin 2021-01, blessing the PBGC's Missing Participant Program as an additional method of addressing a perennial issue in 401(k) terminations - the problem of missing participants and beneficiaries with remaining account balances.. Background.. After a defined contribution plan's termination, DOL regulations provide a safe harbor allowing the . The Department of Labor recently issued informal "best practices" guidance designed to help employers locate missing retirement plan participants to ensure they receive their promised benefits. Guidance seeks to help protect an estimated $9.3T in assets WASHINGTON, DC - The U.S. Department of Labor today announced new guidance for plan sponsors, plan fiduciaries, record keepers and plan participants on best practices for maintaining cybersecurity, including tips on how to protect the retirement benefits of America's workers. EBSA outlined best practices that it has found "effective at minimizing and mitigating the problem of missing or nonresponsive . This blog post addresses two other pieces of guidance issued by the DOL in conjunction with its Best Practices guidance -(i . However, the guidance does not establish the type of clear, bright-line rules many plan sponsors and services providers were asking for. Earlier this month, the U.S. Department of Labor (DOL)'s Employee Benefits Security Administration (EBSA) issued guidance to help retirement plan fiduciaries locate and distribute retirement benefits to missing or nonresponsive participants.

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