RCP

One of the most important functions for a plan sponsor during a defined contribution plan (401k, profit sharing, etc.) termination is the distribution of assets to the participants. For many, contacting plan participants through normal means—certified mail or phone calls—will result in contact with the participant and ultimately resolves the situation. However, there are many circumstances, such as a participant name change or address change, that prevent communication and cause a “lost participant” status on the account. Finding missing participants is the duty of the plan fiduciary. (more…)

This post is meant for retirement plan administrators looking for information on qualified 401k plan termination. Specifically, it will detail the notice of plan termination that must be delivered to participants and provide a blueprint for effective plan closure.
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Employee turnover is commonplace in all organizations and when the time comes for an employee to leave a company for personal reasons or retirement, they often receive a card or a cake and then continue on their way. However, what some companies do not understand is that former employees and missing participants can have a large – and potentially negative – impact on their retirement plan and ultimately, their bottom line.

Recently, Mark Sweatman, President of RCP Retirement Services, authored an article for SHRM Online about how missing participants can cause real problems in an organization. (more…)

The current economic climate has created many problems for employers. As organizations are forced to lay-off employees, very few of these employees are focused on what they may leave behind—their 401(k) plan for instance.

Studies have shown that the longer a terminated employee leaves their money in their former employer’s retirement plan, the more likely it is that they will become a missing participant.

But who is responsible for missing participants? There is someone in your organization that holds the fiduciary responsibility for the plan itself. However, many retirement plans don’t have any type of trigger that automatically reviews terminated participant information to determine if there have been important changes—for instance, if the address has changed or if the former employee is now deceased. Please don’t assume that your record keeper, third party administrator, investment advisor, accountant, or lawyer holds this responsibility. In rare circumstances you may find a provider who will offer this service, but in the end, the employer is typically responsible for making the best decisions for the plan.  (more…)