“I am responsible for our company’s Employee Retirement
Income Security Act (ERISA) 403(b) retirement plan and understand that the
Department of Labor (DOL) recently released guidance on missing participants.
Is there anything we should be concerned about as an ERISA 403(b) plan
Charles Filips, Kimberly Boberg, David Levine and David
Powell, with Groom Law Group, and Michael A. Webb, senior financial adviser at
This is a great question. Up until earlier this year, it
wasn’t just the participants who were missing—the guidance was missing, too.
But on January 12, 2021, the DOL finally issued its long-awaited missing
participant guidance. Let’s take a quick tour of what was included.
The new guidance has three components. The first is Field
Assistance Bulletin (FAB) 2021-01, which outlines the DOL’s enforcement policy
regarding the use of the Pension Benefit Guaranty Corporation’s (PBGC) missing
participant program for terminating defined contribution (DC) plans. You may
recall that while this program was originally just for defined benefit (DB)
plans, in 2017, the PBGC expanded the program to include DC plans. Although
only temporary, the new FAB may provide some helpful assurances for plan
fiduciaries and qualified termination administrators (QTAs) regarding their own
fiduciary liability when managing abandoned plans.
The second piece is Compliance Assistance Release 2021-01,
which describes the DOL’s objectives and general approach in missing
participant investigations of DB plans. The release provides some helpful
insights about the DOL’s investigatory process that may be applied to DC plans
as well. For example, the release notes that the DOL may launch an investigation
of a plan as a result of Form 5500 filings that “report a large number of
retired or terminated vested participants who are entitled to future benefits.”
Last but not least, the final component of the new guidance
is a “best practices” document geared for plan fiduciaries. The document
describes various considerations for plan fiduciaries, including “red flags”
that may indicate a missing participant problem, as well as a long list of what
the DOL considers best practices for participant searches.
Turning to your question, parts of the new guidance may
certainly raise legitimate concerns for plan fiduciaries. For example, the
DOL’s suggestions for search steps include publicizing a list of missing
participants on company intranets, as well as collecting and using social media
information to contact participants. Understandably, plan fiduciaries may be
hesitant to take such steps not only due to individual privacy concerns but
also because of cybersecurity considerations at a time when such risks are already
on the rise.
But at the end of the day, plan fiduciaries grappling with
such concerns may take some comfort from the guidance. The new guidance
expressly preserves flexibility for plan fiduciaries to shape their missing
participant practices as they deem appropriate. In this regard, the new
guidance helpfully recognizes that “not every practice . . . is necessarily
appropriate for every plan,” and that “[t]he specific steps taken to locate a
missing participant, or to obtain instructions from a nonresponsive
participant, will depend on facts and circumstances particular to a plan and
Thus, while plan fiduciaries should consider the DOL’s
suggested search practices and determine if they are appropriate for their
plans, the DOL’s assurances regarding the flexibility of the new guidance
should help relieve many of the concerns plan fiduciaries might otherwise have.
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