What are the Obligations a Plan Fiduciary Needs to Fulfill for Missing Employees?

A plan fiduciary is important if you have a missing employee because they will need to fulfill their obligation to find that employee and to distribute their account balances to them or in another way if they can’t be found.

The first step for the fiduciary to take is to find the employee using several different methods. You need to exhaust all of your options for searching for the employee before you will legally be able to distribute their account balances using different options under ERISA.

1. Write a letter or use electronic notification – Always write the employee a letter and send it first class mail or send an electronic notification letting them know about the distribution of their account balances.

2. Certified mail – This is a very cost effective method for ascertaining if the employee can be found to distribute their benefits to them.

3. Plan records that are related – You always want to check other related plan records for a current address. Another employer or another plan that they have like a group health plan may have the updated information for the employee that you need to locate them.

4. Plan beneficiary – Always contact the designated plan beneficiary to determine if they know where the missing employee is. Often times they can lead you right to them.

5. Services for letter forwarding – The IRS or Internal Revenue Service and the SSA or Social Security Administration both offer letter forwarding services. You can choose one of these two ways to forward letters to be in compliance with the law regarding missing employees and their benefits.

6. Internet search tools – There are often times using the internet to search for an employee will help you locate them. Just surf the keywords employee locator.

7. Credit reporting agencies – Check with these agencies to see if they know where the employee is.

8. Commercial locator services – This is an easy way to use that is sometimes effective for locating missing employees.

Now you need to know what they should do if that person can’t be located. There are many different options open, but you want to choose the one that will best protect the employees account balance.

1. Individual retirement plan rollovers – This is the most popular way to handle missing employees account balances and it definitely protects their balances also.

2. Interest bearing federally insured bank account – You can start this type of account in the employees name, but only if the missing employee will have a right to get money from this account.

3. Unclaimed property funds – This will be done in the state that the employee lives or works so that they may claim it at a later date.

Now that you understand the obligations of a plan fiduciary, it is easier to understand what needs to be done for a missing employee with an account balance. Take your time and be sure that all the steps are taken to find the employee before moving on to the next step so you can be sure you are compliant with the law.