The Pension Benefit Guaranty Corporation (PBGC) has contracted with Serco Inc. for the latter to provide it with field office support services.
The service arrangement has a one-year base period and four option years, with a ceiling value of $200.5 million. Serco will provide services in the areas of benefit administration, document management, records management, administrative support, document intake, database building support, data analytics and process automation. Serco will also operate PBGC’s contact center and help find missing pension plan participants.
Over the last few years, Congress, the Governmental Accountability Office (GAO) and all three federal agencies that regulate retirement plans have been focusing on missing participants. All Employee Retirement Income Security Act (ERISA) plans and tax-qualified plans including 401(a) and 403(b) plans need to worry about locating missing participants. Most DB plans say that benefits for terminated participants will typically begin at the normal retirement age, although the plan could be written to meet required minimum distribution rules (RMD) after age 70.5. If a DB plan participant is missing at retirement age, there may be a failure to follow the terms of the plan if the benefit isn’t paid out timely. This situation can lead to a qualification problem under the tax code and could be a fiduciary breach under ERISA.
While PBGC faces different administration and compliance challenges than individual private sector retirement plans, it is notable that the pension insurance organization is also focused on finding missing participants.
Last July, the ERISA Industry Committee (ERIC) sent a detailed comment letter to Assistant Secretary of Labor Preston Rutledge, encouraging the Department of Labor (DOL) to develop more guidance related to the challenge of employers locating missing retirement plan participants. In a November 2017 memorandum for Employee Plans (EP) examination employees, the Internal Revenue Service (IRS) directed EP examiners not to challenge a qualified plan as failing to satisfy the required minimum distribution (RMD) standards under