Fulcrum Partners is pleased to share the following report, prepared by the Employee Benefits group at Isler Dare PC: The Elusive Search: Considerations for Locating Missing Retirement Plan Participants. You may read or download the full report as a PDF here.
Changes to the tax environment and Internal Revenue Service (IRS) policies are creating a need for organizations to be more diligent in locating retirement plan participants with whom they may no longer have contact. These changes include the following:
- Government agencies have increased audit activity pertaining to required minimum distributions (RMDs) that tax-qualified retirement plans must make to participants upon their attainment of age 70 ½, and the separate requirement that terminating plans distribute all plan assets within 12 months from the plan’s termination. In light of this increased attention by government auditors, employers sponsoring 401(k), 403(b) plans and defined benefit plans need to have processes in place to locate missing plan participants to whom distributions are required to be made.
- The Internal Revenue Service (IRS) recently issued internal directives that provide useful guidance on the procedures that plan administrators should follow in order to avoid the assessment of penalties for failing to make RMDs to missing participants.
- The Pension Benefit Guaranty Corporation (PBGC) issued final regulations that provide employers with an additional option for addressing distributions to missing plan participants when terminating a retirement plan.
Given that the Department of Labor (DOL) has set standards for locating missing plan participants (see Field Assistance Bulletin FAB 2016-01) and in October 2017 and February 2018, the IRS released an outline for procedures for its field auditors, plan administrators now have a clearly defined ‘checklist’ of steps to take in dealing with missing plan participants.
Read the full report to learn how to help your organization deal with missing participants, to be prepared as the plan sponsor for potential audits, and to reduce the risk of incurring IRS penalties.
Learn more at IslerDare.com.
Fulcrum Partners LLC
Securities offered through Valmark Securities, Inc. Member FINRA, SIPC, 130 Springside Drive, Akron, OH 44333-2431, Tel: 1-800-765-5201. Investment Advisory Services offered through Valmark Advisers, Inc., which is a SEC Registered Investment Advisor. Fulcrum Partners LLC is a separate entity from Valmark Securities, Inc. and Valmark Advisers, Inc.
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