404a-3, if the plan fiduciary or QTA complies with the guidance in this memorandum and has acted in accordance with a good faith, reasonable interpretation of section 404 of ERISA with respect to matters not specifically addressed in this memorandum.
1 in connection with the transfer of a missing or non-responsive participant’s or beneficiary’s account balance to the PBGC in accordance with the PBGC’s missing participant regulations rather than to an IRA, certain bank accounts, or to a state unclaimed property fund, as specified in. Pending further guidance, the Department will not pursue violations under section 404(a) of ERISA against either responsible plan fiduciaries of terminating defined contribution plans or QTAs of abandoned plans as described in. Accordingly, it is even more important in the wake of the pandemic to facilitate the transfer of missing participants’ account balances to the PBGC upon the termination or abandonment of an individual account plan and, thereby, increase the likelihood that missing participants can locate and access their benefits. We expect that the economic disruption caused by the outbreak could result in large numbers of workers losing contact with their employers and plans. The COVID-19 emergency may result in some disruption of recordkeeping and search activities of employers, plan fiduciaries and service providers who closed their offices, operate under social distancing or work remotely. As noted in the preamble to the final rule adopting the Program, the Department intends to look into what changes are needed to its safe harbor regulation so that transfers to the PBGC by terminating individual account plans would be eligible for relief under the safe harbor. The Department consulted with the PBGC during the PBGC’s development of its Defined Contribution Missing Participants Program. lifetime income options are available for balance transfers over $5,000.transferred amounts grow with interest (at the applicable Federal mid-term rate) and.benefits are not diminished by ongoing maintenance fees or distribution charges.periodic active searches by the PBGC increases the likelihood of connecting missing participants with their benefits.benefits of any size can be transferred to the PBGC.The PBGC cites multiple benefits of the Program, including: On December 22, 2017, PBGC established the PBGC Defined Contribution Missing Participants Program (Program) to hold retirement benefits for missing participants and beneficiaries in most terminated defined contribution plans and to help those participants and beneficiaries find and receive those benefits. If the conditions of the safe harbor are met, a fiduciary (including a QTA in the case of an abandoned plan) is deemed to have satisfied the requirements of section 404(a) of ERISA with respect to distributing benefits, selecting a transferee entity, and investing funds in connection with the distribution. 1) on behalf of participants and beneficiaries who fail to make an election regarding a form of benefit distribution, including “missing participants.” The safe harbor generally requires that distributions be rolled over to an individual retirement account or annuity (IRA), although in limited circumstances fiduciaries may make distributions to certain bank accounts or to a state unclaimed property fund. 404a–3 provides a fiduciary safe harbor for use in making distributions from terminated individual account plans (as defined in section 3(34) of ERISA) and abandoned plans (as described in. The policy applies to fiduciaries of terminating defined contribution plans and qualified termination administrators (QTA) of abandoned individual account plans (abandoned plans). This memorandum announces the Department of Labor’s temporary enforcement policy on terminating defined contribution plans’ (e.g., 401(k) plans) use of the Pension Benefit Guaranty Corporation’s (PBGC) expanded Missing Participants Program.
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