U.S. Pension Benefit Guaranty Corporation Announces Expansion of Missing Participants Program

The U.S. Pension Benefit Guaranty Corporation (PBGC) has expanded its Missing Participants Program to cover defined contribution plans and certain other defined benefit plans, in addition to PBGC-insured single-employer plans. The program connects missing participants with their retirement benefits when a plan terminates. Plans may use the program voluntarily or choose alternative options such as insurance companies for annuities or private financial institutions. The program is governed by Section 4050 of ERISA and related regulations.

The U.S. Pension Benefit Guaranty Corporation (PBGC) has announced an expansion of its Missing Participants Program, which connects missing participants with their retirement benefits when a plan terminates. According to the PBGC's press release, the program now covers defined contribution plans and certain other defined benefit plans in addition to PBGC-insured single-employer plans. This development is significant for employers and plan administrators who must ensure that terminating plans make arrangements for missing participants' benefits.

The Missing Participants Program was initially introduced as part of the standard termination process for PBGC-insured single-employer plans until 2018. The program's expansion to cover defined contribution plans and certain other defined benefit plans is aimed at providing a more comprehensive solution for terminating plans. According to ERISA Section 4050, plans must make arrangements with some other entity to provide benefits for missing participants when a plan ends.

The expanded Missing Participants Program provides greater flexibility for employers and plan administrators in managing terminating plans. However, the program's complexity is increased by the different rules, forms, and instructions applicable to each type of plan. For instance, PBGC-insured single-employer plans are subject to one set of regulations, while defined contribution plans and small professional services DB plans have their own unique requirements. Moreover, the prior 4050 regulation applies to PBGC-insured single-employer plans that terminated before 2018.

The expansion of the Missing Participants Program is a significant development for employers and plan administrators who must navigate the complexities of terminating plans. Practitioners should be aware of the different options available for sending money to PBGC, including online payment via www.pay.gov or electronic funds transfer (ACH or Fedwire). Moreover, they should familiarize themselves with the program's governance under ERISA Section 4050 and related regulations.