PBGC Expands Missing Participants Program to Include Terminated Defined Contribution Plans

On Dec. 22, 2017, the Pension Benefit Guaranty Corporation (PBGC) issued final regulations that expand its Missing Participants Program (the Program) to defined contribution plans (such as 401(k) and other plans). As background, ERISA requires plan sponsors to distribute plan assets to participants upon termination. The problem with completing that process is often that the employer cannot find certain prior employees. The Program allowed defined benefit plan sponsors who had undertaken a diligent search for these missing employees to transfer the missing employees’ account balances to PBGC. PBGC would then provide those benefits to employees when they were found.

This new regulation broadens the Program to offer it to defined contribution plans, multiemployer plans, professional service plans with 25 or fewer participants, and other defined benefit plans that weren’t previously covered. So, beginning on Jan. 1, 2018, defined contribution plan sponsors that are terminating their plans have the option of transferring missing participants’ benefits to PBGC. PBGC will then provide a centralized benefits directory through which the missing participants can determine if benefits are being held for them.

The new regulations also streamline the program by changing the way that employers determine the amount of money that should be sent to PBGC, increasing protection of participants’ benefits and easing the transfer of benefits to PBGC.

Any employers considering whether they would like to access the PBGC Program should familiarize themselves with the Program to determine if doing so is appropriate.

Final Regulations »