The Department of Labor (DOL) has released a proposed information collection request (ICR) to help implement a forthcoming lost-and-found database to assist individuals with locating missing retirement accounts, but the operation appears to have hit a slight bump in the road.
Section 303 of the SECURE 2.0 Act of 2022, which was enacted on Dec. 29, 2022, requires the DOL—not later than two years after enactment and in consultation with the Treasury Secretary—to create an online searchable database, to be known as the Retirement Savings Lost and Found.
Among other things, SECURE 2.0 requires that this database allow retirement savers who may have lost track of their retirement plan to search for the contact information of their plan administrator in order to make a claim for benefits they may be owed under the plan.
IRS Declines
As for that bump in the road, the DOL notes that it initially had planned to use data that plan administrators submitted to the IRS on Form 8955-SSA (Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits). However, citing concerns under Section 6103 of the Internal Revenue Code (IRC), the IRS has now indicated that it will not authorize the release of this data to the DOL for the purpose of communicating either:
- directly with participants and beneficiaries about retirement plans that may still owe them retirement benefits; or
- indirectly through the Retirement Savings Lost and Found online searchable database.
As a result, the DOL is proposing to request plan administrators to voluntarily furnish the information specified in the proposed ICR.
“By collecting this data, the Department is optimistic that it can work together with plan administrators to further reduce the number of missing participants and promote the payment of promised benefits, thus, helping plan administrators and other fiduciaries resolve issues and inaccuracies in the plans’ books and records, and better comply with their fiduciary obligations,” states the proposed ICR, which was signed by Lisa Gomez, Assistant Secretary for Employee Benefits Security at the DOL.
The notice proposes to request that plan administrators (or their authorized representatives, such as recordkeepers) voluntarily provide the information described in the ICR, including information from plans with separated vested participants; plans that distributed benefits under IRC Section 401(a)(31)(B); and any plan that distributed benefits pursuant to an annuity contract.
“This information is needed by the Department to establish the Retirement Savings Lost and Found online searchable database no later than December 29, 2024,” the notice further advises.
Additional Information
Beyond the information described in Section 523(e) of ERISA, the DOL is asking for the submission of additional data, which consists mainly of mailing and email addresses, and telephone numbers of separated vested participants and beneficiaries. The request also includes an identification of any separated vested participant of normal retirement age or older owed a vested benefit, and who has been unresponsive to plan communications about their vested benefits or whose contact information the plan has reason to believe is no longer accurate.
To simplify the process for plans to furnish the requested information, the DOL is proposing that plan administrators provide the information in an attachment to their 2023 Form 5500 return using the electronic ERISA Filing Acceptance System (EFAST2).
“Although the information would be submitted through EFAST2 along with the plan’s Form 5500, the attachment itself would not be considered part of the Form 5500 annual report filing for purposes of Title I of ERISA,” the notice further explains. The DOL adds that, as it moves forward with the program, it is looking into providing other simple and efficient means of furnishing the data for the online searchable database.
As an aside, the DOL notes that, even though this proposed ICR is voluntary, it has general authority to investigate and collect information under other sections of ERISA, including Sections 504 and 505 of ERISA, as well as to verify participants’ and beneficiaries’ identities under the lost and found database.
To that end, the DOL's Employee Benefits Security Administration (EBSA) currently conducts investigations into circumstances surrounding missing participants. Since 2017, enforcement efforts have recovered more than $6.7 billion for missing participants and beneficiaries. EBSA is hopeful that this new search tool will help participants and beneficiaries locate their money more quickly and more efficiently, helping plans reduce their missing participant counts.
Comments on the proposed ICR must be submitted by 60 days after publication in the Federal Register (which is scheduled for April 16).
