Practical Tips for Playing ‘Hide and Seek’

Finding missing participants is serious business. But one industry expert likens it to a children’s game—though the stakes are higher than simply finding someone else to be “it.” 

“I am sure it feels like a cruel game of hide-and-seek for plan sponsors that are unable to find a participant or beneficiary to pay retirement benefits that are due,” writes Chris Ciminera in “Missing Participants: A Cruel Game of Hide-and-Seek – What to Do When a Participant Can’t Be Found?,” an entry in the Belfint, Lyons, Shuman blog. Ciminera notes that the Department of Labor (DOL) recently issued guidance on this matter, and offers some practical ideas on ways to implement that guidance and “win the game.”   

“Like all games, it takes some work to play, so you can’t win if you aren’t actively engaged,” writes Ciminera. He expresses confidence that by paying attention to processes and taking appropriate steps, it will be “easier for you to win the game and find participants to pay them benefits that they are due,” and that “no matter how hard participants try to hide from you,” it is possible to increase the likelihood “of winning at the confusing game of persuading the elusive participants to take their own money.” 

Information

Ciminera argues that the first consideration in addressing the problem of missing participants is information—more specifically, gathering it. “Remember that the more information you have, the easier it will be for you to find the participant or beneficiary,” he writes. Ciminera suggests that the following is the most basic information that is needed: 

• home address
• the new business address of participants who took new jobs
• email addresses 
• telephone numbers 
• social media contact information 
• emergency contact information

Prevention

An ounce of prevention is worth a pound of cure, says the venerable proverb. Ciminera embraces the concept and suggests ways to prevent participants from going missing in the first place: 

• Write all communications in plain language.
• Make sure that participants and beneficiaries understand the nature of plan communication. 
• Say clearly what plan communication is about when providing notices.
• Add procedures to enrolling and exiting the plan in order that stress the importance of making sure that the plan has accurate contact information.
• Encourage and facilitate updates of participants’ contact and beneficiary information. For instance, include reminders for participants to update their information with plan communications and reports, and when participants access the plan online. 
• Have the original plan name and plan sponsor name on envelopes and correspondence, as a means of helping participants and beneficiaries recognize and understand what the communication concerns and pay attention to it. 
• When undeliverable mail or email is returned, find out what you can.
• Monitor reports of uncashed checks. 
• Make sure that date information in participants’ records is correct; a review of census data is one way to do so.
• Make sure that data transfers properly and fully if the plan adopts a new recordkeeper.

Action Steps 

Fiduciary duty requires performing sufficient procedures to find the participant. “Doing nothing is not an adequate procedure,” Ciminera writes, adding that taking more action at the start will make things easier later. To address the problem and locate missing participants, Ciminera offers some suggestions:  

• Look at all plan and employer records for contact information. “Sometimes all it takes is finding other information you already have,” he writes.
• Contact beneficiaries and emergency contacts. 
• Employ outside resources and databases, such as: 
  • online search engines;
  • public record databases;
  • obituaries; 
  • social media;
  • the Social Security Death Index;
  • commercial locator services; and 
  • credit reporting agencies.
• Use Postal Service certified mail or a private delivery service to send communications the participant’s last known address.
• Contact missing participants’ colleagues.
• Register missing participants on public and private pension registries.

Document

Ciminera reminds that it is important to precisely document procedures followed in trying to find missing participants. And this, he notes, also will be helpful to a plan if there is an investigation by the IRS or DOL.