Heather Bader Comments on DOL’s Guidance for Locating Missing Participants in PLANSPONSOR

In a recent article for PLANSPONSOR, benefits and executive compensation partner Heather Bader commented on guidance from the Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) after the launch of its public Retirement Savings Lost and Found database.

The database serves as a centralized location for individuals or beneficiaries to search for lost or forgotten retirement accounts and receive guidance on claiming their funds. With its launch, the DOL announced it would reduce its focus on enforcement surrounding missing participants but warned that the database is not a one-and-done solution, nor an automatic fulfillment of a plan sponsor’s fiduciary duties.

Bader expanded on guidance issued by the EBSA, sharing that while there is no requirement for plan sponsors to detail their missing participant policies in writing, the DOL has, in the past, “come down heavy” on wanting to see something written. Bader recommends that plan sponsors speak with their advisers and recordkeepers and outline their policies.

“If the DOL investigates them, they have to show they’ve been taking appropriate action,” Bader emphasized. “It’s better for plan sponsors to start looking now than in the midst of an investigation.”

Bader also noted that the automatic plan portability offered by the Portability Services Network LLC, which facilitates the transfer of small retirement account balances among six recordkeepers representing 63% of plan participants, will go a long way in helping solve the missing-participant issue.