What should a plan sponsor do when it cannot find a former participant?

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If you cannot find a participant after the steps outlined below you can set up an IRA for the participant, place in state unclaimed property, or place in a federally insured bank account. The preferred option is an IRA, and the company has to have a compelling reason not to do that.Required Search StepsAt a minimum, fiduciaries should take all of the following steps before abandoning efforts to find a missing participant and obtain distribution instructions.For larger accounts, credit reporting agencies may provide useful information.Use Certified Mail.  Certified mail is an easy way to find out, at little cost, whether the participant can be located in order to distribute benefits.  The Department provided a model notice that could be used for such mailings as part of a regulatory safe harbor (discussed below), but its use is not required and other notices could satisfy the safe harbor.Check Related Plan and Employer Records.  While the records of the terminated plan may not contain current address information, it is possible that the employer or another of the employer's plans, such as a group health plan, may have more up-to-date information.  For this reason, plan fiduciaries of the terminated plan must ask both the employer and administrator(s) of related plans to search their records for a more current address for the missing participant.  If there are privacy concerns, the plan fiduciary engaged in the search can request that the employer or other plan fiduciary contact or forward a letter for the terminated plan to the missing participant or beneficiary.  The letter would request that the missing participant or beneficiary contact the searching plan fiduciary.Check With Designated Plan Beneficiary.  In searching the terminated plan's records or the records of related plans, plan fiduciaries must try to identify and contact any individual that the missing participant has designated as a beneficiary (e.g., spouse, children, etc.) to find updated contact information for the missing participant.  Again, if there are privacy concerns, the plan fiduciary can request that the designated beneficiary contact or forward a letter for the terminated plan to the missing participant or beneficiary.Use Free Electronic Search Tools.  Plan fiduciaries must make reasonable use of Internet search tools that do not charge a fee to search for a missing participant or beneficiary.  Such online services include Internet search engines, public record databases (such as those for licenses, mortgages and real estate taxes), obituaries and social media. DOL databases may also be used.Additional Search StepsIf a plan administrator follows the required search steps, but does not find the missing participant or beneficiary, the duties of prudence and loyalty require the fiduciary to consider if additional search steps are appropriate.  A plan fiduciary should consider the size of a participant's account balance and the cost of further search efforts in deciding if any additional search steps are appropriate.  As a result, the specific additional steps that a plan fiduciary takes to locate a missing participant may vary depending on the facts and circumstances.Distribution OptionsIf accounts are worth $1,000 or less they can be sent to state unclaimed property accounts.There will be circumstances when, despite their use of the search steps described above, the fiduciaries of terminated defined contribution plans will be unable to locate missing participants or obtain distribution directions.  In such cases, the assets can be transferred to a safe harbor IRA.