The Department of Labor this week issued a field assistance bulletin to address the problem of so-called “missing participants”—participants and beneficiaries of terminating or abandoned retirement plans who fail to make an election regarding a form of plan distribution—for ERISA fiduciaries administering these plans. The FAB provides temporary enforcement relief for banks and other ERISA fiduciaries that are left holding retirement assets when plan sponsors are acquired or merged, or are no longer in business.
Specifically, the DOL will no longer pursue violations of fiduciary duties under ERISA against responsible plan fiduciaries of terminating defined contribution plans or qualified termination administrators in connection with the transfer of a missing or non-responsive participant’s or beneficiary’s account balance to the newly expanded Missing Participants Program of the Pension Benefit Guaranty Corporation. The bank fiduciary must comply with the guidance provided in the FAB and in the DOL’s safe harbor regulation on terminating plans, and discharge its fiduciary duties in good faith under ERISA Section 404.
The American Bankers Association has consistently advocated for DOL to provide enforcement relief to banks acting as fiduciaries of terminated and abandoned plans that include missing participants. The FAB provides a welcome option for protection from liability concerns for bank fiduciaries while DOL works on changes to its safe harbor regulation so that transfers to the PBGC by terminating individual account plans will be eligible for relief under the safe harbor.