DOL Investigating Failure of Large Defined Benefit Plan Sponsors to Locate and Distribute Benefits to Terminated Participants
It has been widely reported that the DOL is investigating large defined benefit plans to determine whether their plan sponsors are locating and timely paying benefits to terminated participants. The DOL is looking into whether plans have procedures in place to locate participants, are following those procedures, and are paying required minimum distributions at age 70??. Reportedly, the DOL has already discovered more than $500 million in unpaid benefits. This is a great time for plan sponsors to implement, or update, procedures for locating terminated participants, ensure that such procedures are followed, and verify that accurate birth dates are recorded for all participants to ensure timely commencement of required distributions.