Form 5500- Missing Participant Concerns Clarified
Summary: As long as plan sponsors make (and document) a reasonable effort to locate missing participants and benefices, they can leave alone Lines 4I of the Schedule H and I of the Form 5500 and 10f of the Form 5500-SF. Source: Planadviser.com
IRS Clarifications on Missing Participants:
Prior to the recent IRS announcement, many plan sponsors complained that the IRS had not made it sufficiently clear on how to handle missing participants and beneficiaries on Form 5500. However, in response to the Paperwork Reduction Act notice regarding the 2016 Form 5500 and Form 5500-SF, the IRS has announced that filers who have made a coordinated effort to locate missing participants will face less of a reporting burden.
Plan sponsors, in the absence of additional guidance, “do not need to report on Lines 4I of the Schedule H and I to the Form 5500 and 10f of the Form 5500-SF unpaid required minimum distribution (RMD) amounts to participants who have retired or separated from service, or their beneficiaries, who cannot be located after reasonable efforts or where the plan is in the process of engaging in such reasonable efforts at the end of the plan year reporting period.”
Within the PLANADVISER article, John Manganaro, Deputy Editor, states that, it is “important to note, the new guidance does not actually change plan sponsors’ duty to search out missing participants and is instead limited to completing the identified annual return/report line items.” The IRS warns that plan sponsors should carefully evaluate their plan documents for written and/or required procedures for locating missing participants.