The ERISA Industry Committee is asking the Department of Labor to develop guidance for plan administrators tasked with finding missing terminated vested participants.
In a letter Wednesday to Preston Rutledge, assistant secretary of labor for the Employee Benefits Security Administration, ERIC encouraged the DOL to work with the IRS and the Pension Benefit Guaranty Corp. to issue guidance "that addresses the significant challenge of missing and recalcitrant retirement plan participants, and until such guidance is provided, to stop issuing letters that allege a breach of fiduciary duty related to such missing and recalcitrant participants."
The national association advocating for employer benefits issues said its members are eager to help the agencies formulate the necessary guidance, and "could provide valuable insight based on their daily interactions with participants."
The DOL started a pilot program to address the missing participants issue in 2016 out of EBSA's Philadelphia office and has since expanded it across the country. In fiscal year 2017, the Labor Department recovered $326.7 million for plan participants, and as of early March, the tally was $114.6 million in fiscal 2018, according to agency data.
ERIC said it has received reports that the DOL has issued letters to employers "asserting violations of ERISA and threatening litigation if certain conditions are not satisfied, such as the plan locating all missing participants and all post-retirement age deferred vested participants commencing their benefits."
Although it supports the DOL's efforts to conduct enforcement investigations, ERIC said, "it is extremely troubled by the agency's issuance of these letters asserting breaches of fiduciary duty when there is no applicable legal guidance for plan administers to consider or follow."
As a guide, ERIC said the agencies should consider using the Retirement Savings Lost and Found Act, which was introduced last month by Sens. Elizabeth Warren, D-Mass., and Steve Daines, R-Mont. The proposed bill would use data that employers are already required to report to create a national, online, lost-and-found database for retirement accounts.
Brian Croce is a reporter for InvestmentNews sister publication Pensions & Investments.