Late last year, the Department of Labor (DOL) launched the public Retirement Savings Lost and Found Database. Created as part of SECURE 2.0, the DOL hopes that the database will serve as a centralized location to help missing participants and beneficiaries locate their retirement benefits. Missing participants remain a focus area on audit for the DOL and the IRS. While using the database is voluntary, it may provide plan sponsors with additional evidence that they have met their fiduciary duty to make a reasonable effort to locate retirement plan participants who may be eligible for a benefit.
SECURE 2.0 required the DOL to create a Lost and Found database and tasked them with creating and implementing data collection methods. The DOL initially requested plan information from the IRS, but the IRS declined to provide this information due to tax data privacy laws; however, the DOL was able to utilize Form 8955-SSA to assist in their information collection. Form 8955-SSA requires ERISA plans to report separated participants who have a vested balance. This report does not account for certain information though, which can lead to inaccuracies in the database without more information from plan sponsors.
Plan Sponsors and recordkeepers may, but are not required to, upload information via the Intake Portal using the sample upload template and instructions provided by the DOL. The information to be collected includes the names and Social Security numbers of individuals who are 65 or older, have separated from service, and may be owed a benefit from the plan.
The DOL has requested that plan administrators and recordkeepers update the portal at least annually but stated that a plan may choose to update more frequently. The DOL previously noted that they plan to issue a Notice of Proposed Rulemaking late this summer addressing the implementation of the database. This rulemaking may be delayed due to the recent administration changes.
It may be too soon to tell if the database will be an effective tool, and many of the recordkeepers currently do not have the systems in place to implement the data collection piece, but plan sponsors should continue to keep this option on their radar. Fiduciary claims and lawsuits continue to rise for all ERISA plans, and plan sponsors should continue to track and weigh all options and methods of reducing fiduciary liability. If you have questions about lost participants, fiduciary duties, or any issues related to your plans, please reach out to any of our employee benefits team, and we can help.
