For Immediate Release
Washington, DC – The ERISA Industry Committee (ERIC) today sent a letter to Assistant Secretary of Labor Preston Rutledge encouraging the Department of Labor (DOL) to focus its efforts on developing guidance related to the challenge of employers locating missing retirement plan participants. The letter also asks that until guidance is provided, for the DOL to stop issuing letters that allege an employer has committed a breach of fiduciary duty with respect to the practices utilized to locate missing retirement plan participants.
Employers engage in a multitude of search practices to locate so-called “missing” participants without official guidance from federal agencies on the exact processes they should utilize. Moreover, employers are subject to federal audits of these search practices. Official guidance is needed in providing greater certainty to employers in the operation of their retirement plan and in supporting their ability to locate former employees.
In its letter, ERIC laid out several examples of missteps by the DOL:
- Issuing letters asserting breaches of fiduciary duty when there is no applicable legal guidance
- Assuming that every missing participant can be found
- Assuming that if a missing or recalcitrant participant responds to a DOL mailing (and corrects a missing address or commences payment), then the plan’s previous search and communication efforts must have been faulty
- DOL investigators taking legal positions that are contrary to long-settled fiduciary standards, including telling ERIC members that ERISA’s fiduciary duties require “whatever it takes” to put participants into pay status and to locate missing participants
- Not honoring the legal interpretations of the other Agencies, and in particular, IRS interpretations that are binding on the DOL.
ERIC encouraged the DOL and the other agencies to be consistent in their guidance and that the DOL guidance, specifically, be consistent with long settled fiduciary principles. Such guidance will provide plan administrators with a roadmap that they are certain to follow going forward and will provide DOL investigators with appropriate guidelines on the applicable legal standards and factual assumptions.
“Employers want to be in compliance, and to do so desperately need guidance from the federal agencies on the steps they must take to find missing plan participants. However, current enforcement actions are unnecessarily and unfairly adversarial, creating confusion and undermine industry efforts to be in compliance,” said Will Hansen, Senior Vice President of Retirement and Compensation, The ERISA Industry Committee. “ERIC looks forward to working with the DOL and the other agencies as they develop guidance that addresses the challenges of missing and recalcitrant retirement participants.”
Click here to read ERIC’s letter.