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Washington

PBGC to expand missing participants program beyond single-employer plans

The Pension Benefit Guaranty Corp. is expanding its missing participants program to include terminated defined contribution plans, multiemployer pension plans and small professional service employer plans.

In a final rule to be published Friday in the Federal Register, the PBGC said the changes will go into effect in 30 days.

The rule also streamlines the current program for single-employer plans by removing unnecessary provisions.

PBGC Director W. Thomas Reeder Jr. said the change "represents a new chapter in PBGC's mission. We are going to help connect people in defined contribution plans with their retirement savings, and we're excited to lend our expertise in this area."

Under the expanded program, which applies to plans terminated after Dec. 31, 2017, the PBGC will work with sponsors of terminated 401(k) and other defined contribution plans, including profit-sharing, money purchase, target benefit, employee stock ownership and stock bonus 403(b) plans, to help distribute plan benefits to missing participants. Plans not covered include governmental plans, church plans and plans that cannot pay benefits to PBGC in cash.

The agency will charge sponsors $35 per account to transfer plan benefits into the program and fees will not exceed PBGC's costs.

The new program will also offer a unified unclaimed pension database of missing participants and benefits from terminated DB and DC plans, and a centralized, user-friendly directory for people to check for missing benefits.

First proposed on Sept. 20, 2016, the rule was tweaked in response to comments asking for more clarification on the criteria for being "missing," more flexibility in the diligent search rules for defined benefit plans, and a simpler way for defined benefit plan sponsors to determine the appropriate sums to transfer to the PBGC.