The Department of Labor is now accepting data for its congressionally mandated retirement plan lost-and-found database before it goes live Dec. 29.
The Labor Department’s Employee Benefits Security Administration on Nov. 18 issued a notice requesting information from retirement plan administrators that will allow it to begin populating the database.
SECURE 2.0, the retirement security package that Congress passed in December 2022, requires the department to set up an online searchable lost-and-found database, allowing savers who lost track of their retirement plan to search for their plan administrator’s contact information.
To populate the database, the department needs retirement plan administrators, record keepers and other service providers to voluntarily provide the information as a first step toward making the database available to the public, the department said in its notice. It’s also asking record keepers and third-party administrators to promote the database to both plans and participants, work with their plan clients to obtain authorization and submit the requested data directly to the database.
The requested information includes the name and Social Security number for any participant who separated from service, is owed a benefit from the plan and is age 65 or older.
The department said it narrowed the scope of its requested information in response to public concerns that the proposal it released in April was overly broad and unnecessarily burdensome.
Originally, the department had planned to use existing data that 401(k) plans regularly submit to the IRS and Social Security Administration, but the IRS decided it cannot share such data with the Labor Department, citing disclosure and confidentiality restrictions, according to an April proposal from the department.
SECURE 2.0 established the database to cut down on missing participants.
Retirement plans lose track of missing participants for a variety of reasons, including incomplete record keeping and workers changing jobs, the department said. In other cases, workers may lose track of their retirement plans after their former employer goes out of business or when companies merge, it added.
“The fundamental purpose of any job-based retirement plan is to pay promised benefits to the workers who participate in those plans and plan beneficiaries,” said Lisa M. Gomez, assistant secretary for employee benefits security, in a statement. “Our goal, which we believe plan sponsors and administrators and their service providers share, is to make sure that workers and their beneficiaries receive all the retirement benefits they earned and were promised through their working careers so that they can look forward to a secure and enjoyable retirement. The retirement savings lost-and-found database will be another tool to help plans carry out this responsibility. We all need to work together to achieve that goal, and we appreciate the partnership of the retirement plan community in moving forward.”
