IRS modifies letter-forwarding program to help locate missing plan participants

The IRS has announced that it will no longer forward letters on behalf of plan sponsors or administrators of qualified retirement plans or qualified termination administrators (QTAs) of abandoned plans under the Department of Labor’s Abandoned Plan Program who are attempting to locate missing plan participants and beneficiaries.

This change affects retirement plan sponsors and administrators who are searching for plan participants or beneficiaries in order to correct failures that require payment of additional benefits in accordance with the Employee Plans Compliance Resolution System (EPCRS). Accordingly, in future guidance on EPCRS, the IRS said that it intends to provide an extended correction period for plan sponsors and administrators affected by this change in the letter-forwarding program.

“Humane purpose”

Under the prior guidance (Rev. Proc. 94-22), plan administrators, sponsors of qualified retirement plans, or QTAs of abandoned plans under the Department of Labor’s Abandoned Plan Program attempting to locate missing plan participants, were allowed to make a written request to the IRS to use its letter forwarding program. The IRS noted that, since its letter-forwarding program began, numerous alternative missing person locator resources, including the Internet, have become available to assist a plan sponsor or plan administrator in locating a missing participant or beneficiary owed a retirement benefit, enabling the program change.

The letter-forwarding program is now limited to situations in which a person is trying to locate a taxpayer to convey a message for a “humane purpose” or in an emergency situation. A humane purpose is one in which a person is seeking to find a missing person to convey a message of an urgent or compelling nature, or is seeking to find a missing person because of an emergency situation. Locating a missing taxpayer who may be entitled to a retirement plan payment or other financial benefit from an individual, company or organization is not considered to be a humane purpose for which the IRS will provide letter-forwarding services.

Effective date

The new guidance applies to requests postmarked on or after August 31, 2012. Requests that are postmarked prior to that date will continue to be processed pursuant to Rev. Proc. 94-22.

Source: Rev. Proc. 2012-35.

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For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer’s Benefits Reports.

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