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ARTICLE · 26 JANUARY 2021

Terminating A 401(k) Plan? The DOL Blesses Use Of The PGBC Missing Participant Program

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The DOL recently issued Field Assistance Bulletin 2021-01, blessing the PBGC's Missing Participant Program as an additional method of addressing a perennial issue in 401(k) terminations...

United StatesEmployment and HR
Katrina McCann
Katrina McCann
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The DOL recently issued Field Assistance Bulletin 2021-01, blessing the PBGC's Missing Participant Program as an additional method of addressing a perennial issue in 401(k) terminations - the problem of missing participants and beneficiaries with remaining account balances.

Background.

After a defined contribution plan's termination, DOL regulations provide a safe harbor allowing the distribution of remaining accounts to individual retirement accounts (IRAs). This safe harbor is conditioned on the plan administrator providing the required distribution notice and the account holder's failure to timely make a distribution election. At the end of 2017, the PBGC expanded its Missing Participant Program, opening up the option for plan fiduciaries of defined contribution plans to transfer remaining account balances to the PBGC rather than to an IRA provider. If the plan fiduciaries have performed a diligent search within the past 9 months, the PBGC Missing Participants

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