The Pension Benefit Guaranty Corporation’s (PBGC) recently released final rule updating the agency’s regulations on missing participants in terminated single-employer defined benefit (DB) plans newly extends the program to retirement plans not previously covered. These include most defined contribution (DC) retirement plans (e.g., 401(k) and profit-sharing plans), PBGC-covered multiemployer pension plans (MEPPs), and small (25 or fewer participants) professional service organizations’ defined benefit plans.
The final rule, which will include a “unified unclaimed pension database,” applies to plans – other than MEPPs – that terminate on or after Jan. 1, 2018, and gives DC plan sponsors the option to transfer the assets to the PBGC, rather than to establish individual retirement accounts at a financial institution for the missing participants. For terminating MEPPs, the rule applies to plans where the actual date of payment (i.e., plan close-out) is on or after Jan. 1, 2018. This Client Action Bulletin provides some more perspective.