News Blog

How to Locate Missing 401(k) Plan Participants

Posted 12:00 PM by

Do you know where all of all of your plan participants are? Terminated participants in a retirement plan can cause plan sponsors to incur additional time and fees, long after they are terminated, if their balance remains in the plan. With today’s requirements for annual fee disclosures, a plan sponsor is responsible for continuing to provide terminated participants with annual disclosures and statements. Also, terminated participants with a balance drive up the participant count, which may result in increased per participant charges and even contribute to the requirement of an annual independent audit of the plan.

It is always a good idea to provide participants with paperwork to request their distribution immediately after they leave employment. If participants have a large enough balance, you will not be able to force them to take a distribution. However, smaller balances may be forced out of the plan while you still have contact with the participant.

One of the most common reasons terminated participants remain in the plan is that the plan sponsor is eventually unable to locate the participant. In this case, there are procedures to follow to help you locate the participant, document your efforts in case of failure, and handle the participant’s remaining balance.

As a fiduciary of a retirement plan, your company has a responsibility to search for all terminated participants with a balance in the plan. Finding missing participants can be a difficult task to accomplish and it only grows more onerous with the passage of time. However, employers must make a reasonable effort to locate a participant; and the sooner you begin the process the more likely you will succeed.  

As a first step, if mail that was sent to a terminated participant is returned as undeliverable, resend the letter/package through certified mail to create a record of your attempt to locate the participant. Also document for your records your effort to contact the participant through:

  • Other employees who may still know how to reach them
  • Beneficiaries and emergency contacts listed in the plan and other company records, such as the health plan

If unsuccessful in maintaining contact, below are a few additional options that may be beneficial:

  • The National Registry – This is a website that allows employers to list names of missing plan participants who have unclaimed retirement benefits. Individuals who believe they have unclaimed retirement accounts can search using their Social Security Number (SSN) for a match. If there is a match, the participant is asked to provide contact information.

  • Search Firms – There are numerous search firms who will search for participants based on a last known address and SSN. There is a fee involved for this option that will vary from company to company. Several of these search firms can be found on the Internet. This will save you from using internal resources to conduct the search.
  • Internet Searches – Internet searches, including Facebook and LinkedIn, can prove to be effective. There are both free and fee-based sites. The following are free sites:

Note that as of August 2012, the Internal Revenue Service discontinued its letter forwarding program and no longer forwards letters on behalf on plan sponsors or administrators to missing former plan participants.