The Pension Benefit Guaranty Corp., Washington, has proposed a regulation to help sponsors that can't close out their pension plans because of missing participants.
The proposed regulation would only apply to sponsors that want to terminate fully funded, single-employer defined benefit plans.
The program "addresses a problem that has long plagued many employers: what to do about missing workers and retirees who cannot be found when a fully funded plan ends," said Labor Secretary Robert Reich.
Under the proposal, the PBGC would take over after the plan sponsor attempts a thorough search for a missing participant. Sponsors would pay the PBGC the pension benefit the missing participant would have received; then the plan sponsor is able to close out the plan.
Once the participant is found, the PBGC would pay the pension benefit.
The agency already has a missing participants program for defined benefit plans that terminate and do not have enough funds to pay benefits. In fiscal 1994, the PBGC was able to find the addresses for 26,000 of 30,000 missing participants; the agency estimates about 1,000 people are missing each year. What's more, President Clinton's pension simplification proposal calls for the program to be extended to defined contribution plans, a PBGC spokeswoman said.
Comments on the proposed regulation are due Oct. 10; the agency expects a final rule in December.