Key Takeaways
- The Employee Benefit Security Administration (EBSA) of the US Department of Labor (DOL) recently released its Fact Sheet: EBSA Restores Nearly $1.4 Billion to Employee Benefit Plans, Participants, and Beneficiaries: ebsa-monetary-recoveries.pdf
- One of the targets of their investigation is “missing participants”. The DOL refers to that program as the “Terminated Vested Participant Benefits Payments”. Impressively, the EBSA recovered $429,200,000 for participants under that program in the 2023-2024 fiscal year.
- Plan sponsors/fiduciaries and their advisors would be well-advised to determine whether they have “missing participants” and, if so, take steps outlined by the DOL to address the issue.
As explained in my last post, Things I Worry About (7), the DOL’s EBSA has a number of programs that can restore benefits to plans and participants. Those include:
- Civil investigations.
- Criminal investigations.
- Informal complaint resolutions.
- Correction programs.
The issue of “missing participants” comes up in civil investigations. In those investigations the DOL examines whether a plan has former employees who left their accounts in the plan and whether the plan continues to provide the legally required disclosures and to ensure that the participants are aware of their benefits. I put “missing participants” in quotes because the definition I broader than it appears. There isn’t a legal definition, but the practical definition is that it is a former employee who left the employment of a plan sponsor, but did not take a distribution of his or her benefits. If plan communications (e.g., emails, mail, disclosures) are sent to a former employee who has benefits in the plan and it appears that the communications were received, the former employee is not “missing.” But, if the emails and mailings are kicked back as undeliverable, the participant is missing.
Continue reading Things I Worry About (8): DOL Investigations and Unsuspecting Plan Sponsors (2)
