The Department of Labor on Jan. 14 said it will not purse enforcement actions under ERISA against plan sponsors fiduciaries who transfer entire benefit payments owed to missing participants of $1,000 or less to state unclaimed property funds.
The temporary enforcement policy — Field Assistance Bulletin No. 2025-01 —aims to provide retirement plan fiduciaries with an option to help manage small benefit amounts owed to individuals who cannot be located, according to the announcement from the DOL’s Employee Benefits Security Administration.
To qualify for relief, fiduciaries must meet the conditions set forth in the policy:
1. The plan fiduciary determines that the transfer to a state unclaimed property fund is a prudent destination for the participant's or beneficiary's retirement benefit payments;
2. The plan fiduciary has implemented a prudent program to find missing participants consistent with the Department's Best Practices for Pension Plans and nevertheless has been unable to locate the participant or beneficiary;
3. The plan fiduciary selects the state unclaimed property fund offered by the state of the last known address of the participant or beneficiary;
4. The plan's summary plan description explains that retirement benefit payments of missing participants or beneficiaries may be transferred to an eligible state fund and identifies the name, address, and phone number of a plan contact for further information concerning the eligible state funds to which the retirement benefit payments are transferred; and
5. The state unclaimed property fund qualifies as an eligible state fund as defined in the bulletin.
“This policy gives fiduciaries an additional option for handling small outstanding retirement benefit payments owed to missing participants and beneficiaries,” said Assistant Secretary for Employee Benefits Security Lisa M. Gomez, in a statement. “Our goal is to reunite participants and beneficiaries with their retirement benefits and this new policy will support fiduciaries’ ability to choose this option when prudent and provide individuals with another option for finding benefits that may be owed to them.”
Missing participants has been an enforcement priority at EBSA over multiple administrations.
In fiscal year 2023 — the most recent available data — EBSA recovered $429 million in enforcement actions from its Terminated Vested Participants Project, which includes missing participants. That was down from $542 million in fiscal year 2022 and $1.5 billion each in fiscal years 2021, 2020 and 2019.
The department in 2021 released guidance that included best practices for retirement plan fiduciaries to help reduce missing-participant issues and ensure that participants receive promised benefits.