Field Assistance Bulletin (“FAB”) 2025-01 was released on January 14, 2025. The last guidance released by the DOL in relation to missing participants was back in 2021. The key issue being addressed is what plan sponsors are permitted to do with missing participants and beneficiaries and the plan benefits for them. Ideally, a plan administrator should have some sort of procedures to quickly identify and locate participants when they first go missing. The sooner that a participant can be identified as missing, the easier it is to locate them. Beneficiaries are more challenging because it could be years or decades before a plan administrator even knows that a former participant has died and that it has to determine and locate the proper beneficiaries for the benefit.
Historically, the DOL has encouraged plan administrators to utilize individual retirement accounts for missing participants. However, commenters have pointed out that this is not always available and have encouraged the DOL to reconsider the availability of state unclaimed property programs, commonly known as “escheating” the funds to the state.
This memorandum announces a temporary enforcement policy under the Employee Retirement Income Security Act of 1974, as amended (ERISA), applicable to small retirement benefit payments owed to missing participants or beneficiaries that a responsible plan fiduciary voluntarily decides to pay over to a state unclaimed property fund from an ongoing defined contribution or defined benefit pension plan.
Please use the following link to read the Bulletin:
https://www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/field-assistance-bulletins/2025-01