This Procedure & Checklist is meant to assist a plan fiduciary in meeting its fiduciary obligations under the Employee Retirement Income Security Act (“ERISA”) with respect to missing participants of a terminated defined contribution plan. Issues arise when a participant fails to respond to the plan fiduciary’s communications regarding benefit distribution directions upon plan termination or when such communications to a participant are returned to the plan fiduciary as undeliverable. The plan fiduciary has an obligation to make reasonable efforts to locate all missing participants following termination of a defined contribution plan, consistent with Field Assistance Bulletin No. 2014-01 (“FAB 2014-01”) issued by the Department of Labor (“DOL”). FAB 2014-01 can be found here.

For purposes of this Procedure & Checklist, the term “missing participant” will include beneficiaries of a deceased participant and alternate payees under a qualified domestic relations order who are entitled to benefits under the terminated plan. This Procedure and Checklist does not apply to defined benefit plans, defined contribution plans that provide annuity options, or employers that maintain other defined contribution plans within the corporate group to which account balances from the terminating plan could be transferred.

Procedure

The plan fiduciary of a terminated defined contribution plan should complete the Checklist below for each missing participant. If the plan fiduciary reasonably determines that a missing participant cannot be located after completing the “Required Search Steps” and “Additional Search Steps” (if required), then the plan fiduciary may distribute the missing participant’s benefit in accordance with the “Distribution Steps.”

If the plan fiduciary properly distributes the missing participant’s benefit, the individual will no longer be covered under the plan, and the benefits will no longer constitute “plan assets” that are protected under ERISA. However, if the plan fiduciary breaches its fiduciary duties during the search or distribution process, then the missing participant may be able to bring a lawsuit against the plan fiduciary for breach of fiduciary duty under ERISA.

The plan fiduciary may charge a missing participant’s plan account for any reasonable expenses incurred attempting to locate the individual. The summary plan description for the plan should notify participants of this potential charge.

Checklist

**The plan fiduciary should retain a copy of the completed checklist for each missing participant with its records for the terminated defined contribution plan.**

Click here to view the table.

**The plan fiduciary should retain a copy of the completed checklist for each missing participant with its records for the terminated defined contribution plan.**

DOL Model Notice of Plan Termination

[Date of notice ]

[Name and last known address of plan participant or beneficiary]

Re: [Name of plan]

Dear [Name of plan participant or beneficiary]:

This is to inform you that the [name of plan ] (Plan) has been terminated and we are in the process of winding it up.

We have determined that you have an interest in the Plan, either as a plan participant or beneficiary. Your account balance on [date] is/was [account balance]. We will be distributing this money as permitted under the terms of the Plan and federal regulations. {If applicable, insert the following sentence: The actual amount of your distribution may be more or less than the amount stated in this notice depending on investment gains or losses and the administrative cost of terminating your plan and distributing your benefits.

Your distribution options under the Plan are {add a description of the Plan's distribution options}. It is very important that you elect one of these forms of distribution and inform us of your election. The process for informing us of this election is {enter a description of the election process}.

If you do not make an election within 30 days from your receipt of this notice, your account balance will be transferred directly to an individual retirement plan (inherited individual retirement plan in the case of a nonspouse beneficiary). {If the name of the provider of the individual retirement plan is known, include the following sentence: The name of the provider of the individual retirement plan is [name, address, and phone number of the individual retirement plan provider].} Pursuant to federal law, your money in the individual retirement plan would then be invested in an investment product designed to preserve principal and provide a reasonable rate of return and liquidity. {If fee information is known, include the following sentence: Should your money be transferred into an individual retirement plan, [name of the financial institution] charges the following fees for its services: {add a statement of fees, if any, that will be paid from the participant or beneficiary’s individual retirement plan }.}

For more information about the termination, your account balance, or distribution options, please contact [name, address, and telephone number of the plan administrator or other appropriate contact person].

Sincerely,

[Name of plan administrator or appropriate designee