The U.S. Pension Benefit Guaranty Corporation may start providing new services to help plan sponsors spend less time identifying, locating and corresponding with missing plan participants.
The agency is seeking public comment until Aug. 20 on several aspects of administering a missing participants program when terminating individual account plans, according to a June 21 Federal Register posting. PBGC is asking for information about: (1) demand for a program; (2) demand for a database of missing participants; (3) competing private-sector services; (4) potential costs and fees; and (5) user search requirements.
PBGC, which guarantees pension benefits in terminated or defaulted private-sector defined benefit plans, is mandated by ERISA to operate a missing participants program for single-employer plans. The Pension Protection Act of 2006 also authorized it to provide one for multiemployer plans and an optional program for non-covered individual account defined contribution plans and DB plans. The act also required non-covered plans to submit information to PBGC about missing participants’ benefits.
ERISA defines “missing participants” as participants or beneficiaries under a terminating plan whom the plan administrator cannot locate after a “diligent search.”
Among the questions with which PBGC requests help from the public are the following:
- For pension consultants: Among individual account plans that you are familiar with, what proportion has participants they cannot find? Among such plans, what is the average number of participants the plan cannot find? In your experience, what is the average account balance and account balance range for participants that cannot be found? What services for missing participants in individual account plans are unavailable in the competitive private marketplace (for example, those handling very small benefits or qualified joint and survivor annuity benefits)? Why are they unavailable (for example, because it is not cost-effective to provide them)?
- If PBGC provided services for missing participants’ accounts in terminating individual account plans comparable to those the private sector provided and charged comparable fees, would you be likely to choose the PBGC program or the private-sector program, and why?
- How would individual account plans’ choice to use a PBGC missing participants program be affected by: (1) fees PBGC might charge; (2) the minimum benefit size PBGC might accept; (3) optional or mandatory electronic filing; and (4) other possible program features?
PBGC asks commenters for quantitative and qualitative examples or analysis in their responses to these questions. Comments may be submitted through any of the following methods:
- federal eRulemaking Portal: www.regulations.gov;
- email: reg.comments@pbgc.gov;
- fax: 202-326-4220; or
- mail or hand delivery: Office of the General Counsel, Pension Benefit Guaranty Corporation, 1200 K Street N.W., Washington, DC 20005-4026.
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