Earlier this year, legislation was proposed to compel ERISA retirement plans to locate “lost” participants. RESA (the Retirement Enhancement and Savings Act of2018) did not move forward, but the view is that later in 2018, some or all the components in this bill could be put back on the table. A proposed bill could outlinerequired procedures that plan sponsors follow to locate missing participants and satisfy their fiduciary liability. In addition to utilizing certified mail to contactparticipants at their last known physical address, other measures may include performing electronic searches, contacting beneficiaries, or using a location searchfirm.
In addition, a “lost and found” database could be established to record defined benefit payments that did not make it to participants in the event of small-balanceforced cash-outs. The bill would specify a requirement to roll over these funds into an IRA, target date fund, or special Retirement Savings Lost and Found account(especially for accounts less than $1000) that is designed to earn a rate of return. The bill would also raise the cap on forced cash-outs from $5000 to $6000.