NEWSLETTERS

How to Locate Missing Participants

Locating a terminated plan participant to make a distribution from a qualified retirement plan could be  troublesome, especially if years have passed and the former employee has moved several times.   Plan sponsors are required to make “substantial efforts” to find former participant who are effectively missing.  A participant’s vested balance must be paid to the participant or his/her beneficiary.  It cannot simply revert to other participants or to the employer.

The IRS has a Letter-Forwarding Program in which it helps locate missing individuals for organizations and plan sponsors.  The IRS will forward a letter for you to the participant you are trying to reach.  The IRS cannot provide you with the participant’s address and cannot confirm if the letter was deliverable.  If a letter is returned to the IRS, it will be destroyed, but you will not be notified.   The IRS cannot inform the sender of any action taken or of any results.  The IRS will only send a letter acknowledging the receipt of the correspondence and indicating whether or not the letter to forward was accepted into the Letter-Forwarding Program.

Assistance involving 49 or fewer recipients

Requests for letter-forwarding assistance involving 49 or fewer recipients should be sent to the closest IRS Disclosure Officer.  In Illinois, the address is:  Letter Forwarding Unit, P.O. Box 47421 Stop 93, Doraville GA 30362.  There is no charge by the IRS for providing this service to 49 or fewer individuals.

Provide a cover letter stating why the IRS' assistance is being sought, listing the name(s), social security number(s), and, if available, the last known address(es) of the individual(s) who cannot be located.  Also include the name and address of the person to whom the IRS should send an acknowledgment letter.

The letter to be forwarded should tell the recipient the reason for the letter, include instructions as to what the recipient should do to contact the sender if he or she decides to respond, must clearly state that responding is optional, and must include the following disclaimer: “In accordance with current policy, the Internal Revenue Service has agreed to forward this letter because we do not have your current address. The IRS has not disclosed your address or any other tax information and has no involvement in the matter aside from forwarding this letter.  Your response to this letter is completely voluntary.”

Assistance involving 50 or more recipients

Requests involving 50 or more potential recipients will be processed under Project 753,  Computerized Mailout Program.  The charge for Project 753 requests is estimated at $1,750.00 plus $0.50 per letter forwarded.  The cost is subject to change and actual costs will be billed after the mailing is completed.  Requests for service under Project 753 should be sent to:  Letter Forwarding Unit, P.O. Box 47421, Stop 93, Doraville GA 30362.

Provide a cover letter providing a brief explanation of the need for letter forwarding, the number of potential recipients, whether the requester has the social security number of each individual it wishes to contact, a sample letter to be forwarded that is on the organization's letterhead and signed by an authorized person, an estimate of the value of assets being held for individuals who cannot currently be contacted, and a statement that the requester is aware the IRS will charge a fee for this service.

The letter to be forwarded should be general in nature, should not be addressed to specific individuals, should not be longer  than three  typewritten  pages, should include instructions as to what the recipient should do to contact the sender if he or she decides to respond, and must contain in the opening paragraph the following disclaimer: “In accordance with current policy, the Internal Revenue Service has agreed to forward this letter because we do not have your current address. The IRS has not disclosed your address or any other tax information and has no involvement in the matter aside from forwarding this letter.  Your response to this letter is completely voluntary.”

For a step by step outline of the letter-forwarding program, please visit the IRS’ website at: http://www.irs.gov/retirement/article/0,,id=110139,00.html

Another option available is to use the internet to search for former employees.  There are many companies which offer location services.  They normally provide the last know address.

If you would like to discuss various option to locate former participants please contact Administrative Retirement Services, Inc. at 630-942-0010 or visit our website at www.ars401k.com.

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