The Ultimate Guide to Missing Participants and Beneficiaries

Lawyers, employers, and insurance companies sometimes need to find missing participants or beneficiaries for inheritance or a benefits payout. Finding a missing participant can be a difficult task to undertake on your own. A missing participants program can provide the search services you need to locate this individual for their payout. At Silverseal, we have years of experience delivering the investigations and consulting services you need.

If you are searching for a missing participant or beneficiary, this guide will provide the information you need and answers to common questions related to missing participants and beneficiaries.

What Is a Missing Participant?

A missing participant is an individual beneficiary of an inheritance or benefits payout or a former qualified employee with funds left in a retirement savings plan. They aren’t likely managing their plan account, or the account has out-of-date contact information. In some cases, a missing participant may be deceased and the plan sponsor is unaware. If this status is known, the plan’s benefits should be given to the beneficiaries, who sponsors must then locate.

An unresponsive participant is similar. In this case, you may have the correct address but are unable to definitively contact this participant. They may not be acting in their own best interests, such as failing to cash a distribution check.

What Causes Missing Participants?

Though many missing retirement plan participants are aware of their accounts, others may not know they have an account. The best way to avoid missing participants is to implement prevention strategies. However, even with the best practices in place, you may still deal with missing participants.

Various factors can cause missing participants of 401(k) and other retirement plans, such as:

Job change: When a retirement plan participant changes jobs, this could lead to them becoming a missing participant.
Plan changes: Changes to a plan, such as an acquisition or a company merger, can cause a missing participant status.
Relocation: Many Americans move multiple times in their lifetime. This can lead to an individual becoming a missing participant.
Death: As participants age, the risk of death increases. Some participants die before reaching retirement age, and as such, become missing participants in their retirement plan.

The following are signs or red flags of a missing participant:

Uncashed, outstanding distribution check
No recent phone or web account activity
Returned emails and mail
Lack of procedures and policies for handling undeliverable email or returned mail
Several other missing or nonresponsive participants
Incomplete, inaccurate, or missing contact information, such as an address, email, birthdates, social security numbers, and spousal information

If you notice any of these signs, you could have a missing participant on your hands.

Why You Should Be Concerned About Missing Participants

As a plan sponsor, there are a few reasons you should formulate a plan to locate missing participants.

Why Plan Sponsors Should Be Concerned About Missing Participants

Missing participants are becoming a more prevalent issue for plan sponsors. A missing participant can cause fiduciary risk, increased plan costs and administrative burdens. For a plan sponsor, a missing participant can lead to an audit, where the plan’s procedures and policies regarding locating missing participants will be reviewed and scrutinized. A missing participant can impact any type of plan, including 401(k) and 403(b) plans:

Fiduciary responsibility: The main reason you should find a missing participant is because of your fiduciary responsibility. All participants should receive a disclosure, including former employees with a remaining account balance. Government agencies like the Internal Revenue Service (IRS), Pension Benefit Guaranty Corporation (PBGC), and Department of Labor (DOL) are concerned about fiduciary responsibility and distributions.
Required minimum distributions: Required minimum distributions vary according to the plan. For example, a plan may require distribution after a participant with a small balance leaves their job position. Making required minimum distributions can help you lower plan costs by reducing the total balance of accounts. Having fewer participants can also lower audit costs.

A missing participant is considered a more critical issue when they are near or at a distributable event, such as a required minimum distribution. During this time, the DOL is interested in ensuring a participant receives the benefits they are owed, and the IRS wants to collect on deferred taxes.

Why Plan Sponsors Should Be Concerned About Missing Participants

Prevalence of the Missing Participant Issue

In defined contribution plans, there are an estimated three million missing participant accounts. As participants switch jobs and move, this number continues growing, and more participants leave their retirement savings behind. One in five relocations lead to a missing participant, and 9% of participants won’t verify their address if requested by a former employer. To avoid issues with address or account updates, 60% of participants prefer an automated process for updates.

A third of participants discover they have a retirement account with a former employer that they were previously unaware of, and new research suggests the problem of stale addresses for terminated participants could be even larger for those with no obvious red flags. Even when addresses are assumed up-to-date, employers and plan sponsors found more stale addresses than anticipated.

What Regulations Apply to Missing Participants?

Several regulations address locating missing participants in the financial services industry:

PBGC Vol. 82, No. 245 Fed. Reg. 60,800: The PBGC Vol. 82, No. 245 Fed. Reg. 60,800 requires a plan administrator to perform a diligent search before participating in the program.
DOL Field Assistance Bulletin No. 2014-01: DOL Field Assistance Bulletin No. 2014-01 refers to missing participants and fiduciary duties within terminated defined contribution plans. This guidance outlines the obligation that plan fiduciaries should follow to search for missing and lost participants when a defined contribution plan is terminated.
DOL Field Assistance Bulletin No. 2021-01: DOL Field Assistance Bulletin No. 2021-01 authorizes plan fiduciaries to terminate the use of the PBGC missing participant program in defined contribution plans for nonresponsive or missing participants’ account balances.
DOL Compliance Assistance Release No. 2021-01: Under the DOL Compliance Assistance Release No. 2021-01, you will find an outline of the general investigative approach to facilitate plan fiduciaries’ voluntary compliance efforts.
National Council of Insurance Legislators (NCOIL) model law: The NCOIL model law was developed to make sure beneficiaries receive payment of death benefits in a timely manner.
Securities Exchange Commission (SEC) 17 CFR § 240.17Ad-17: SEC 17 CFR § 240.17Ad-17 is a regulation outlining search efforts that broker-dealers and transfer agents should conduct if they maintain accounts of missing or lost accountholders.
DOL best practices for missing participants and pension plans: DOL best practices for missing participants and pension plans outlines what steps retirement plans fiduciaries should follow to reduce missing participant problems and ensure a plan participant receives their benefits upon reaching retirement age.
IRS field directive regarding RMDs and missing and lost participants: The IRS field directive regarding RMDs and missing and lost participants instructs IRS examiners to not challenge a qualified plan for failing to meet RMD standards as long as the plan follows the appropriate steps for locating the missing participant.

When you choose to work with a missing participant search services provider like Silverseal, we keep up-to-date on regulations and offer the peace of mind you need.

Best Practices for Finding Missing Participants

Concerns regarding the DOL’s missing participant investigations include the cost and length of investigations and a lack of uniformity across field offices. To address these concerns, the DOL issued three pieces of guidance regarding locating missing participants:

Best practices document: This document outlines practices that plan fiduciaries should consider for finding missing participants.
Field Assistance Bulletin 2021-01: This resource outlines the enforcement policy that authorizes the use of the PBGC program for nonresponsive and missing participants.
Compliance Assistance Release 2021-01: This resource outlines the approach under the terminated vested participants enforcement project that regional offices in investigations should take.

As a plan fiduciary, you can utilize the best practices document to navigate your fiduciary obligations to missing participants. Best practices and guidance regarding missing participants correlate the missing participant’s status with the intensity of the search:

Low-level intensity: If a participant is not near a normal distribution event, they may not get usual plan mailings. Because there is not an impending distribution event, the search can be less intense. You can use a low-cost automated approach to search for the missing participant.
Mid-level intensity: When a distribution event is approaching for a participant, search intensity should increase because the participant may be at risk of not receiving their benefits. For a search at this level, you can utilize an automated search, reach out to the participant, and verify their address.
High-level intensity: When a participant is at or past a distribution event, the search should be the highest intensity. In this case, you will broaden your forensic search to include other tools and a search specialist.

According to the DOL, a plan fiduciary should determine which missing participant best practices will cost-effectively lead to the best results. This aligns with the duty of prudence under ERISA, which requires a plan fiduciary to behave as a prudent person would in a similar capacity and circumstances. Best practices include:

Structuring the Search

Some general etiquette tips to keep in mind include:

Use plain language.
State upfront what the communication is about.
Facilitate contact through toll-free numbers, the plan, and the plan sponsor websites.
Mark correspondence and envelopes clearly with the sponsor name or the original plan for participants who separated prior to the change in the plan or sponsor name.

Following Leads

At a minimum, you should send a notice via United States Postal Service (USPS) certified mail, check employer records, utilize free electronic search tools, and send the designated beneficiary an inquiry to locate the missing participant. Follow these best practices and trust your missing participant search services provider like Silverseal to do the same:

Reach out to a missing participant’s colleagues.
Use a commercial locator service to locate an individual.
Follow up on uncashed checks and undeliverable email or mail.
Use union member communications for locating a missing retiree.
Attempt contact with the missing participant via phone numbers, email addresses, and social media.
Register missing participants on private or public pension registries with cyber security and privacy protections.
Utilize public record databases, free online search engines, social media, and obituaries to locate missing participants.
Get updated contact information by checking with the employee’s emergency contacts and designated plan beneficiaries.
Use death searches such as the Social Security Death Index for participants who are nonresponsive for a long period.
Check related employer and plan records for beneficiary, participant, and emergency contact or next of kin contact information.

Maintain Existing Records

Reduce the chance of missing participants with these practices:

Maintain accurate census information for the participants in the plan, and audit and correct information regularly.
Send regular requests for updates to beneficiaries’ contact information.
Include requests for contact information and changes in plan communications.
Establish steps for the exit processes for retiring or separating employees.
Build steps into the enrollment and plan onboarding processes for new employees.
Provide prompts for beneficiaries and participants to verify their contact information when they log into online platforms.
Collaborate with the plan’s recordkeeper to find and address shortcomings in communication and recordkeeping practices.
Monitor and maintain an online platform that plan participants can use to manually update their contact information.
Address the transfer of relevant employment records and appropriate plan information if there is an acquisition, business merger, or a change in recordkeepers.
Periodically contact current and retired participants and beneficiaries to update or verify contact information, including addresses, phone numbers, emergency contact information, and social media information.
Communicate information regarding how eligible employees can consolidate accounts from rollover IRAs or prior employee plans.

What to Look for in Missing Participant Search Services

Finding missing participants is a task best left to the professionals. A missing participant search services provider can help you find the participant you are looking for, but first, you should know what makes a provider the right partner for you. If you are considering missing participant search services, the following are some qualities to look for:

Flexible: Depending on your search requirements, the search provider should offer several search levels.
Reliable: When you partner with a company for missing participant search services, you want to know that the results delivered are reliable. Though no search process can be entirely reliable, the provider should transparently explain how they have tested their search process and optimized it to maximize reliability.
Audit trail: For audit trail purposes, all participant interaction and search history should be saved.
Reporting: Missing participant location services should offer access to an online portal. This portal includes reporting, spreadsheet-based output, and ad hoc inquiry.
Affordable: Your search provider should offer affordable missing participant search services. While the automated process implemented for handling missing participant searches for a recurring or large volume of participants may be an investment, it should be cost-effective for you.
Experience: Search services should have experience successfully locating missing participants under regulatory regimes. You want to work with a company that knows what it’s doing.
Success rate: The search services provider you choose should have a high success rate for locating missing participants and updated addresses. This lets you know you’re partnering with someone who can deliver results.
Security and privacy: All of the data involved should be securely stored and transmitted. The search provider you choose should be SOC 2-certified.
Commitment to improvement: The missing participant search services provider should be committed to continuously improving and updating their search processes to improve reliability.

For the best missing participant search services, turn to us at Silverseal.

Missing Participant Search Services From Silverseal

At Silverseal, we offer missing participant search services to help you find the person you are searching for. When you need locating services, turn to us. We can find the individual you are looking for, whether a missing participant, a witness, an heir, or a delinquent debtor. For more than two decades, we have been delivering missing participant search services to attorneys, private citizens, creditors, and plan sponsors.

Our ability to efficiently and empathetically reunite people with our proprietary data sources makes us the top choice for your missing participant investigation and has allowed us to obtain one of the highest success rates in the industry. Locating services we provide include:

Search services for witnesses: Our investigations team includes former law enforcement professionals and former NYPD chiefs. After assigning an investigator to your missing person case, they are dedicated to the task of locating your witness and will adhere to a comprehensive investigative process. Surveillance is a critical component of our locating services for witnesses, and expert analysts support our operation center and combine data from secure online sources with our detectives’ human intelligence.
Search services for missing heirs: We can conduct an extensive search for a missing beneficiary or a missing or unknown heir. Our global network supports information production and documentation from anywhere in the world. Our track record of successfully locating missing heirs serves as proof of our capabilities and dedication.
Search services for delinquent debtors: To track down a delinquent debtor, we use data resources and multiple tools and strategies. Our substantial investments in technology let us provide our clients with the best possible locating services for delinquent debtors and maintain compliance with debt collection laws.

If you are seeking another hard-to-locate individual, we can pull from several sources to find them, even if they have not been contacted for years or decades. Our team is compromised of experts who search public records, navigate name and address changes, and identify critical links and personal relationships. Whether searching for a missing business partner, an estate settlement’s absent heir, or a previous deed owner from a real estate transaction, locating missing persons is our specialty.

Our comprehensive security solution has allowed us to successfully track missing persons for law firms, Fortune 500 companies, financial institutions, governmental organizations, commercial clients, and high-net-worth individuals. Since our inception, we have stood ready to find missing participants and protect you and your business.

Contact Us at Silverseal for Missing Participant Search Services

At Silverseal, we have been surpassing industry standards since 1988. Our leadership team includes military professionals and senior law enforcement with years of experience in surveillance, complex investigations, security management, event security, executive protection, site and risk assessment, security consulting services, and training program design and management. We also provide private investigative services.

We value professionalism, trust, integrity, transparency, teamwork, and honesty and use these values to guide our service principles. If you need locating services in New York, London, Rome, Denver, or anywhere else in the world, contact Silverseal to learn more about our missing participant search services.