4 Ways to get ahead of missing participants

Best practices to help plan sponsors meet their fiduciary responsibilities for distributing retirement benefits.

PUBLISHED - 03/22/2021

Getting employees to save for retirement and manage their plan investments is top of mind for most employers, but what if all of your efforts to help employees save those hard-earned monies is wasted because a participant forgets to keep their contact information updated?

Many employees are not claiming their retirement benefits merely because they may not be aware that keeping their contact information up to date with plan sponsors and recordkeepers is a key element in preparing for retirement.

Recently, the Department of Labor (DOL) issued guidance to help employers meet their obligations for locating and distributing retirement benefits to missing or nonresponsive participants. The guidance applies to both defined contribution and defined benefit plans and highlights four focus areas for plan fiduciaries to make sure participants receive promised benefits when they reach retirement age:

1. Maintenance of contact information: The DOL recommends that plans maintain accurate census information for the plan participant population by encouraging participants to update their contact and beneficiary information; tracking undeliverable mail and outstanding checks; and regularly auditing plan data to correct data errors. The DOL also encourages plans to employ methods to update participant contact information when undergoing corporate actions or transfers of plan and employer records.
2. Developing clear participant communication strategies: Simplifying and strengthening the prominence of participant communications—as well as educational materials for onboarding and exiting employees regarding retirement benefits—is a key factor in helping employees understand that they need to keep contact information current in order to ensure they don’t lose track of outstanding checks or benefits. Plans can also enable Electronic Funds Transfer (EFT) capability for participants to avoid lost or uncashed paper checks.
3. Data maintenance and searches: When missing participants are identified through returned mail or missing contact information, the DOL recommends checking plan and employer records for alternative contact information; reaching out to beneficiaries and employer emergency contacts for updated contact information; using free and commercial locator searches; using certified mail or other mail services that provide tracking; and registering missing participants on public and private registries that have privacy and cybersecurity protections.
4. Missing participant policies and procedures: Plans should maintain procedures and develop action plans to get ahead of missing participant and uncashed check issues by overseeing service providers, as well as monitoring consistent implementation and compliance.

Setting your plans and participants up for retirement success

Review the recent DOL guidance with your legal counsel to help determine what measures to consider to minimize missing participants and outstanding checks. Our service teams can then coordinate with you to review Fidelity’s lost shareholder and outstanding check services. Note that our standard services do not incorporate all the best practices set forth in the DOL guidance, so please consider additional measures to minimize missing participants and outstanding checks – including adding our enhanced missing participant offering through Fidelity Workplace Consulting.

Additionally, plan sponsors can easily obtain reporting in Plan Sponsor WebStation^® (PSW^®) to locate lists of participants who are coded as “missing” in Fidelity’s system due to returned mail or other indications that the participant’s address of record is out of date.

As a simple and cost-efficient way to help maintain accurate participant data, plan sponsors can request that participants regularly review and update their contact information on NetBenefits^® and in employer/HR records. Log into PSW® to access the Digital Contact Information toolkit – which includes employee engagement resources and instructions for uploading digital contact information.

Going a step further
Talk with your Fidelity representative about our enhanced missing participant services available through Fidelity Workplace Consulting, including:

• Searching targeted plan populations (e.g., all terminated vested);
• Next of kin searches;
• Validating life status;
• Performing searches on any designated beneficiaries; and
• Certified mail services, which can include participants not recordkept at Fidelity.

We can also help ensure that clients have a well-rounded missing participant policy, assist with pension calculations on late mandatory payments, and evaluate impacts to valuation files.

Contact your Fidelity representative for tools and resources to manage missing participants and help clear the path for financial wellness.