The Pension Benefit Guaranty Corporation (PBGC) has expanded its Missing Participants Program to terminated 401(k) and other plans in an effort to connect more people to their retirement savings. The expanded program is voluntary for defined contribution and small professional service plans and will be available for plans that terminate on or after January 1, 2018. Before the expansion, the program was open only to terminated PBGC-insured single-employer defined benefit plans.
Beginning this month, terminating defined contribution plans will have the option of transferring missing participants’ benefits to PBGC instead of establishing an IRA at a financial institution. Participant accounts will not be diminished by ongoing maintenance fees or distribution charges, and PBGC will pay out benefits with interest when participants are found. When implemented, the enhanced program will make it easier for people to locate their retirement benefits after their plan terminates. Because the expanded program is only open to plans that terminate on or after January 1, 2018, PBGC expects it will be several months before new missing participant names are added to the existing online directory.
PBGC coordinated closely with other government agencies to ensure that his final regulation is in accordance with guidance from the Department of Labor and the Internal Revenue Service.
For more information, please contact author Patti Smith via e-mail or phone (502.882.4434) or see the PBGC’s Expanded Missing Participants Program webpage (https://www.pbgc.gov/prac/missing-participants-program).