Unclaimed Pension Money

KarenTN

We have several former pension plan participants we are unable to locate. Have made good faith effort, requested assistance from IRS, etc. Still no luck. I would like to get their account balances off our records. It was suggested by an auditing IRS agent that we contact the Pension Benefit Guarantee Corporation for assistance. I have not been successful in getting any information along these lines from PGBC. Is anyone familiar with PGBC regarding the transfer of unclaimed funds?

Down_the_Middle

This happens occasionally to us (with a $40M DB pension trust) and after reasonable efforts to locate the former employee have failed, the $'s remain in the fund. There's no distribution to anything/anyone.

Jen D

When you say you asked for the IRS' help, did you use the letter forwarding program?

I looked up your question in the Defined Benefit Answer Book, and I was surprised to discover that the book instructs that in the case of a lost participant, their account balance can be forfeited, as long as the benefit is reinstated if there is a subsequent claim for the benefit. The answer refers to Treas Reg 1.411(a) - 4(b)

I'm not familiar with this procedure, however. Do you have a recordkeeper/actuary or ERISA attorney? They may be able to provide some guidance as well. Another resource on the Internet is the messages boards at Benefitslink.com. They have message boards for just about every topic regarding benefit plan administration. I have found some really useful discussions, so you may want to check them out. I'm sure someone there has had this problem before.

Good luck!

KarenTN

Thanks for the info. Benefitlinks is a great resource. We decided to go the forfeiture route. Our pension attorney was not familiar with PBGC regarding unclaimed funds. Our plan was audited last year and the IRS agent made the suggestion, so we thought it might be a good alternative to forfeiture. It seems to be a well kept secret.