Skip to content
  • Home
  • Services
    • Audit & Attest
      • Financial Statement Audits
      • Employee Benefit Plans
      • Attestation Engagements
      • Compilations & Review
      • SOC
      • Agreed-Upon Procedures
    • Advisory
      • Transaction Advisory Services
      • Cybersecurity, Technology Risk, Privacy
      • High Net Worth Services
      • Forensic Services
      • Litigation Services
      • Management Consulting
      • Technology Services
      • Valuation Services
    • Business & Tax
      • Corporate Income Tax
      • Individual Income Tax
      • International Tax
      • State and Local Tax Compliance and Tax Minimization Services
      • Tax Planning
    • T&C Family Office Group
  • Industries
    • Construction & Real Estate
    • Healthcare
    • Manufacturing & Distribution
    • Nonprofit Organizations
    • Private Equity Firms
    • Privately-held Companies
    • Technology & Energy
  • Firm
    • Overview
    • Our People
    • Our Community
    • Templeton Group
      • PracticePro 365
      • T&C Family Office Group
      • Templeton Investigative Services
  • Careers
    • Experienced
    • Students
    • Benefits
  • News
  • Pay My Bill
  • Home
  • Services
    • Audit & Attest
      • Financial Statement Audits
      • Employee Benefit Plans
      • Attestation Engagements
      • Compilations & Review
      • SOC
      • Agreed-Upon Procedures
    • Advisory
      • Transaction Advisory Services
      • Cybersecurity, Technology Risk, Privacy
      • High Net Worth Services
      • Forensic Services
      • Litigation Services
      • Management Consulting
      • Technology Services
      • Valuation Services
    • Business & Tax
      • Corporate Income Tax
      • Individual Income Tax
      • International Tax
      • State and Local Tax Compliance and Tax Minimization Services
      • Tax Planning
    • T&C Family Office Group
  • Industries
    • Construction & Real Estate
    • Healthcare
    • Manufacturing & Distribution
    • Nonprofit Organizations
    • Private Equity Firms
    • Privately-held Companies
    • Technology & Energy
  • Firm
    • Overview
    • Our People
    • Our Community
    • Templeton Group
      • PracticePro 365
      • T&C Family Office Group
      • Templeton Investigative Services
  • Careers
    • Experienced
    • Students
    • Benefits
  • News
  • Pay My Bill
CONTACT US

What employers can do about missing 401(k) plan participants

  • Uncategorized

When employees leave their jobs, financial advisors typically encourage them to roll over their 401(k) plans into a new employer’s plan or perhaps an IRA. Many people follow this advice, but not everyone.

As you may be able to attest, many employers that sponsor 401(k)s or other qualified plans end up with account holders who are former employees with out-of-date contact information. In benefits parlance, these individuals are “missing participants.”

The situation can create administrative hassles for you at first and, later, turn into a major problem when the accounts in question must start making distributions. Here are some best practices to consider when you find yourself with a missing participant.

Getting started

When a participant is unresponsive or you reasonably believe your contact information is inaccurate, first consider taking four basic steps:

  1. Use certified mail to reach out to the person or, if more cost-effective, a private delivery service with similar tracking features,
  2. Review your employment records and all your benefits plans for up-to-date information,
  3. Attempt to identify and contact the individual’s designated beneficiaries under those plans for information, and
  4. Use free electronic tools such as internet search engines, public record databases and social media accounts.

You might also reach out to a participant’s colleagues or union, as well as register the person’s name on public or private pension registries. According to guidance issued by the U.S. Department of Labor, privacy concerns regarding such actions can be alleviated if your retirement plan fiduciary asks the missing participant’s current employer, other plan fiduciary or beneficiary to have the missing participant contact your retirement plan.

Escalating your efforts

If initial search steps are unsuccessful and the account balance is large enough to justify the expense, paying for a professional search may be appropriate. This could mean using fee-based internet search engines, commercial locator services, credit-reporting agencies, information brokers, investigation databases and other similar premium services.

You might be able to charge the fee against the account if it’s reasonable and the allocation method is consistent with your plan’s terms and the Employee Retirement Income Security Act.

Giving up 

Some plan documents describe how to handle account balances of missing participants when search efforts fail. Others may authorize administrative committees to adopt policies for this situation. Following written policies and procedures for handling missing participants — and documenting actions taken — helps ensure consistency and lower the risk of legal liability.

Some plan provisions or policies direct fiduciaries to allocate the funds in the account among the accounts of the remaining participants, subject to restoration if the individual should reappear. Under IRS regulations, such an allocation may be a permissible forfeiture so long as the plan is obligated to restore the missing individual’s account balance in the event the person is eventually found.

Preventing the issue

Perhaps obviously, the best practice of all is to establish strong administrative procedures that minimize the likelihood of missing participants. These include:

  • Proactively maintaining an accurate plan census,
  • Periodically prompting participants and beneficiaries to reconfirm their contact info, and
  • Regularly auditing census data, paying special attention to contact info in business transactions or when recordkeepers change.

Even changing the way plan communications are written and designed can increase the chances that participants will recognize and engage with them.

Addressing the challenges

Sponsoring a 401(k) plan can help attract strong job candidates, retain employees and boost morale. But plan administration has its challenges — and one of them is missing participants. Work with your benefits advisors to address the matter. Meanwhile, we can help you assess the costs and financial impact of your plan.

© 2024

Categories
  • Agribusiness
  • Assurance, Advisory & Review
  • Audit & Attest
  • Blog
  • Business and Tax
  • Business Consulting & Corporate Compliance
  • Corporate Income Tax
  • Current Opportunities
  • Cybersecurity, Technology Risk, Privacy
  • Employee Benefit Plan
  • Employee Benefit Plans / 401(k)
  • Healthcare
  • High Net Worth Individuals
  • High Net Worth Services
  • Individual Income Tax
  • Industries
  • Manufacturing & Distribution
  • Newsletter Articles
  • Newsletters
  • Nonprofit
  • Press Releases
  • Privately Held Companies
  • Professional Services
  • Real Estate & Construction
  • Retail
  • Services
  • Specialty Tax Services
  • State and Local Tax Complianc
  • T&C Family Office Group
  • Tax Planning
  • Tax Planning & Compliance
  • Technology
  • Uncategorized
  • Valuation Services
  • Valuation Services

SHARE THIS ON:

RELATED POSTS

Startup costs and taxes: What you need to know before filing

The U.S. Census Bureau reports there were nearly 447,000 new business applications in May of 2025. The bureau measures this by tracking the number of

Read More »

4 reasons why avoiding probate is a smart estate planning move

When planning your estate, one of the smartest strategies you can adopt is to minimize or avoid probate. Probate is a legal procedure in which

Read More »

Give members reasons to continue supporting your nonprofit

Reliable income streams are worth their weight in gold. Unfortunately, these days some people may be feeling some economic uncertainty and think twice about renewing

Read More »

Contact Us

WEST PALM BEACH
Esperante Building
222 Lakeview Avenue
Suite 1200
West Palm Beach, FL 33401
(561) 798-9988
Fax: (561) 798-4053

FORT LAUDERDALE
The Main
201 East Las Olas Boulevard
Suite 1650
Fort Lauderdale, FL 33301
(954) 333-0001
Fax: (954) 765-0719

Twitter Facebook Instagram Youtube Linkedin
© 2025 Templeton & Company. All Rights Reserved. Website by Weber & Co.
Services
  • Audit & Attest
  • Advisory
  • Business & Tax
  • T&C Family Office Group
  • Pay My Bill
  • Audit & Attest
  • Advisory
  • Business & Tax
  • T&C Family Office Group
  • Pay My Bill
Industries
  • Construction & Real Estate
  • Healthcare
  • Manufacturing & Distribution
  • Nonprofit Organizations
  • Private Equity Firms
  • Privately-held Companies
  • Technology & Energy
  • Construction & Real Estate
  • Healthcare
  • Manufacturing & Distribution
  • Nonprofit Organizations
  • Private Equity Firms
  • Privately-held Companies
  • Technology & Energy
Firm
  • Overview
  • Our People
  • Our Community
  • Templeton Group
  • Terms & Conditions
  • Overview
  • Our People
  • Our Community
  • Templeton Group
  • Terms & Conditions
Careers
  • Experienced
  • Students
  • Benefits
  • Experienced
  • Students
  • Benefits