The recently released final rule from the Pension Benefit Guaranty Corporation (PBGC) 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 plans 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 January 1, 2018, and gives DC plan sponsors the option to transfer the assets to the PBGC, rather than to establish individual retirement accounts at financial institutions 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 January 1, 2018. This Client Action Bulletin provides some more perspective.