Unable to Locate Plan Participants

Our Company

We are committed to helping each of our clients succeed. For this reason our employees attend specialized classes and conferences to keep up-to-date with the latest audit, accounting, and tax requirements.

Are you able to locate all of the participants in your retirement plan? Are any of those over 70½? If so, those employees are required to take a minimum distribution out of their retirement plans each year. According to a recent memo from the IRS, a qualified plan will not be challenged by auditors for failing to meet the required minimum distribution standards as set forth in the Internal Revenue Code, so long as the plan made reasonable efforts to locate the person.

The first step the employer should take in order to not be challenged by the IRS is to search the plan and related plan, sponsor, and publicly-available records or directories for any alternative contact information. Then, the plan should use a commercial locator service, credit reporting agency, or an internet search tool that specializes in locating individuals. Finally, the plan should attempt to contact by USPS certified mail to his/her last known mailing address. After the plan has exhausted all of these steps, there is nothing further for the employer to do.

If you have any questions, contact us at 1-866-287-9604.

Posted by Justin Hurst