The nation’s private pension plan insurer is looking to expand its Missing Participants Program.
The Pension Benefit Guaranty Corporation (PBGC) is proposing an expansion of its Missing Participants Program to cover terminated 401(k) and other defined contribution plans and certain defined benefit plans that the program does not now cover. Currently, the program is open only to PBGC-insured single-employer plans.
Under the proposal, rather than establishing an IRA at a financial institution for each missing participant account, plans would have the option of transferring benefits to the PBGC, which then would hold the money, add the missing participant to its online searchable database and periodically search for the participant. Participant accounts would not be diminished by ongoing maintenance fees or distribution charges from an IRA, and would be paid out with interest.
The PBGC also is proposing changes to the way the program works for PBGC-insured single-employer plans. The changes relate primarily to:
- how plans determine the amount of money to transfer to the PBGC;
- better protection of key features of a participant's benefit (e.g., early retirement subsidies); and
- reducing the burden of transferring benefits to the PBGC.
The expanded program would cover PBGC-insured multiemployer plans that close out and certain DB plans the PBGC does not insure; for instance, small plans sponsored by professional service organizations. The PBGC expects limited usage by these plans.
The PBGC expects that the expanded program will be implemented in 2018, after receiving public comments and publishing the final regulation.
