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Treasury Issues New Guidelines on Searching for Missing Retirement Plan Participants

The US Department of the Treasury recently issued guidance that retirement plan sponsors should consider as part of their obligation to take reasonable steps to locate missing participants. Specifically, the Treasury issued a memorandum which sets forth guidelines that prohibit auditors from challenging qualified plans as failing to satisfy the required minimum distribution standards under Internal Revenue Code (IRC) Section 401(a)(9) if the plan has fulfilled all of the following with respect to participants that cannot be located:

  • Searched for alternative contact information in plan, plan sponsor and publicly available records for directories; 

  • Used a commercial locator service, credit reporting agency or a proprietary internet search tool for locating individuals; and 

  • Sent mail via United States Postal Service (USPS) certified mail to the last known mailing address and attempted contact “through appropriate means for any address or contact information,” which includes email addresses and telephone number.

The Treasury guidance is similar to, but also expands upon, prior guidance provided by the US Department of Labor, which addresses locating missing participants for terminated retirement plans.

Locating missing participants and beneficiaries can be challenging for plan sponsors. Many plan sponsors find that they are unable to locate participants who left employment many years prior and, as a result, are unable to make required minimum distributions. Both the IRS and Department of Labor have stepped up their enforcement of these requirements in recent years. In particular, the Department of Labor has made locating missing participants an enforcement priority for plan audits. 

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About this Author

Jeffrey M. Holdvogt, Employee Benefits, Executive Compensation, McDermott Will Emery, Law Firm
Partner

Jeffrey M. Holdvogt is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office. 

Jeffrey focuses on matters related to employee benefits and executive compensation, including pension, profit sharing, 401(k), ESOPs, welfare and nonqualified deferred compensation plans.   Prior to joining McDermott, Jeffrey served as a law clerk for the Honorable Paul H. Anderson and James H. Gilbert of the Minnesota Supreme Court.

While in law school, he was an...

312-984-7564
Maureen O'Brien, McDermott Will Emery, qualified plan design Attorney, welfare Administration lawyer
Counsel

Maureen O'Brien is counsel in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  She focuses her practice on advising clients on a broad range of employee benefits matters, including qualified plan design, welfare plan design, employee benefit plan compliance issues, fiduciary matters, multiemployer pension plan issues and nonqualified deferred compensation plans.

312-984-3242
stepanovic, chicago, associate
Associate

Rick Stepanovic focuses his practice on employee benefits and executive compensation matters. He has experience working on matters related to tax-qualified pension plans, health and welfare plans, and deferred compensation arrangements. He also has experience handling correction and administrative matters before the Internal Revenue Service and the Department of Labor.

While in law school, Rick was the Managing Editor of the Michigan Journal of Environmental and Administrative Law. He previously worked as a law clerk in the US Attorney’...

312-984-2054