The Pension Benefit Guaranty Corporation (PBGC) has expanded its missing participants program to terminated 401(k) plans in an effort to make it easier for people to locate their retirement benefits. This new option is only available for plans terminating after January 1, 2018.

Under this voluntary program, instead of establishing an IRA on the missing participant’s behalf, an account balance transfer for every missing participant in the 401(k) plan must be made to the PBGC. This means plans cannot initiate the transfer for only certain missing participants in the plan, but rather the entire group of missing individuals must have their account balances transferred. Plans will pay a one-time fee of $35 for each missing participant (or beneficiary) entitled to a benefit, although if the account balance is less than $250, there is no fee.

In lieu of transferring assets to the PBGC, plans could also elect to notify the PBGC about the participant or beneficiary entitled to the benefits, providing specific information required by the program. There is no fee to use this feature.

“Missing” has a specified definition under the program. Participants are considered missing if they are considered either unlocatable or unresponsive under the program’s precise standards.

The deadline to participate is the later of 90 days after the last distribution is made to the non-missing participants or one year after the plan’s termination date.

Please contact your Nyhart consultant with questions about the new program and how Nyhart can help.