60800 Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Rules and Regulations 

1Not all terminated plans are included. ERISA 

section 4050(a)(1) refers to plans subject to ERISA 

section 4041(b)(3)(A). That includes plans in 

standard terminations (as stated in section 

4041(b)(3)(A)) and plans in ‘‘sufficient distress 

terminations’’ (as provided for in section 

4041(c)(3)(B)(i) and (ii)), but not plans trusteed by 

PBGC. 

PENSION BENEFIT GUARANTY 

CORPORATION 

29 CFR Parts 4000, 4001, 4003, 4041, 

4041A, and 4050 

RIN 1212–AB13 

Missing Participants 

AGENCY: Pension Benefit Guaranty 

Corporation. 

ACTION: Final rule. 

SUMMARY: The Pension Benefit Guaranty 

Corporation (PBGC) administers a 

program to hold retirement benefits for 

missing participants and beneficiaries in 

terminated retirement plans and to help 

those participants and beneficiaries find 

and receive the benefits being held for 

them. The existing program is limited to 

single-employer defined benefit pension 

plans covered by the pension insurance 

system under the Employee Retirement 

Income Security Act of 1974 (ERISA). 

With this final regulation, PBGC revises 

the existing program to simplify 

procedures and remove unnecessary 

rules and, as authorized by the Pension 

Protection Act of 2006, establishes 

similar programs for most defined 

contribution plans, multiemployer plans 

covered by the pension insurance 

system, and certain defined benefit 

plans that are not covered. 

DATES: Effective date: This rule is 

effective January 22, 2018. 

Applicability date: This rule applies 

to termination of a plan other than a 

multiemployer plan covered by title IV 

of ERISA where the date of plan 

termination is after calendar year 2017. 

This rule applies to the close-out of a 

multiemployer plan covered by title IV 

of ERISA where the close-out is 

completed after calendar year 2017. 

This rule does not apply to PBGC’s 

payment of missing participant benefits 

attributable to prior terminations. The 

provisions of 29 CFR part 4050 as in 

effect immediately before January 22, 

2018 apply to PBGC’s payment of 

missing participant benefits attributable 

to prior terminations. 

FOR FURTHER INFORMATION CONTACT: 

Stephanie Cibinic (cibinic.stephanie@

pbgc.gov), Deputy Assistant General 

Counsel for Regulatory Affairs, 202– 

326–4400 extension 6352; or Deborah C. 

Murphy (murphy.deborah@pbgc.gov), 

Assistant General Counsel, Office of the 

General Counsel, Pension Benefit 

Guaranty Corporation, 1200 K Street 

NW, Washington, DC 20005–4026; 202– 

326–4400 extension 3451. (TTY and 

TDD users may call the Federal relay 

service toll-free at 800–877–8339 and 

ask to be connected to 202–326–4400 

extension 3451 or 202–326–4400 

extension 6352.) 

SUPPLEMENTARY INFORMATION: 

Executive Summary 

Purpose of the Regulatory Action 

This regulation is needed to 

implement changes in the statutory 

basis for the missing participants 

program. The changes provide for 

expansion of the program to cover 

defined contribution (individual 

account) plans, multiemployer pension 

plans, and small professional service 

employer plans not covered by title IV 

of ERISA. 

PBGC’s legal authority for this action 

comes from section 4002(b)(3) of ERISA, 

which authorizes PBGC to issue 

regulations to carry out the purposes of 

title IV of ERISA, and section 4050 of 

ERISA, which gives PBGC authority to 

prescribe regulations regarding missing 

persons owed benefits under terminated 

retirement plans, including rules on the 

amounts to be paid to and from the 

program and how to search for missing 

participants and beneficiaries. 

Major Provisions of the Regulatory 

Action 

The final regulation streamlines 

requirements and eliminates 

unnecessary provisions in the existing 

missing participants program, expands 

the program to most terminated defined 

contribution plans, to terminated 

multiemployer plans covered by title IV, 

and to terminated professional service 

plans with 25 or fewer participants. 

Under the regulatory action, PBGC will 

charge fees for plans to transfer benefits 

into the program; the fees will not 

exceed PBGC’s costs. Responding to 

comments on the proposed rule, the 

regulatory action modifies the criteria 

for being ‘‘missing,’’ provides more 

flexibility in the diligent search rules for 

defined benefit plans, and simplifies the 

existing procedures for defined benefit 

plans to determine the appropriate sum 

to transfer to PBGC on behalf of a 

missing participant or beneficiary. 

Background 

In General 

The Pension Benefit Guaranty 

Corporation (PBGC) administers the 

pension plan termination insurance 

program under title IV of the Employee 

Retirement Income Security Act of 1974 

(ERISA), which applies to most defined 

benefit (DB) plans. In general terms, a 

DB plan is a retirement plan that 

provides specified benefits and is 

subject to certain funding requirements. 

Within statutory limits, PBGC 

guarantees benefits of participants and 

their beneficiaries upon the 

underfunded termination of a plan 

covered by title IV. PBGC also monitors 

the termination of covered plans that are 

fully funded for guaranteed benefits, 

which must follow procedures provided 

under title IV. 

The process of closing out a 

terminated retirement plan involves the 

disposition of plan assets to satisfy the 

benefits of plan participants and 

beneficiaries. One difficulty faced by a 

plan administrator in closing out a 

terminated plan is how to provide for 

the benefits of missing persons. This 

problem was addressed for singleemployer plans subject to the title IV 

insurance program by the creation, 

under the Retirement Protection Act of 

1994 (RPA ’94), of a program 

administered by PBGC to deal with the 

benefits of missing participants and 

beneficiaries in terminated plans.1

Section 4050 of ERISA, as added by 

RPA ’94, requires a plan administrator 

to undertake a diligent search (subject to 

definition in PBGC regulations) for each 

missing participant or beneficiary. It 

further describes procedures for a plan 

to follow in calculating the amount to be 

transferred to PBGC for a person who is 

missing, and for PBGC to follow in 

providing benefits to the person when 

the person ultimately appears—also 

subject to PBGC regulations. PBGC 

implemented the program in part 4050 

of its regulations in 1996. 

Authorization of Expanded Program 

The Pension Protection Act of 2006 

amended section 4050 of ERISA to 

expand its scope dramatically—offering 

the prospect of participation in the 

missing participants program to 

terminated multiemployer plans 

covered by title IV and several 

categories of terminated non-covered 

plans, including most defined 

contribution (DC) plans. In general 

terms, a DC plan is a retirement plan 

that provides for a participant to receive 

whatever is in the vested portion of the 

participant’s retirement account. 

Section 4050(c) of ERISA provides for 

program participation for title IV 

multiemployer plans similar to that for 

title IV single-employer plans now in 

the program (although close-out of a 

multiemployer plan may not follow 

immediately upon plan termination). 

Non-title IV plans described under 


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2See http://www.pbgc.gov/documents/2013- 

14834.pdf. 

3See http://www.dol.gov/ebsa/publications/ 

2013ACreport3.html. 

4See http://www.dol.gov/ebsa/regs/fab2014- 

1.html. 

5See 29 CFR 2550.404a–3. In certain limited 

circumstances, the Department of Labor’s safe 

harbor permits a fiduciary to distribute a missing 

participant’s account balance to a federally insured 

savings account in the missing participant’s name 

or a State unclaimed property fund in lieu of a 

rollover to an individual retirement plan. 

6See 29 CFR 4050.202. 7See 29 CFR 2578.1. 

section 4050(d) of ERISA would be 

eligible (but not required) to turn 

benefits of missing participants and 

beneficiaries over to PBGC, and PBGC is 

further authorized (but not required) to 

provide for non-title IV plans to report 

how they dealt with missing persons’ 

benefits not placed either with PBGC or 

another retirement plan. To develop a 

better understanding of the DC plan 

community’s needs and desires for, and 

likely responses to, an expanded 

missing participants program, PBGC 

published a request for information 

(RFI) on June 21, 2013 (at 78 FR 37598). 

The RFI sought information about the 

number of missing participants in 

terminated plans, the size of their 

benefits, and how the benefits were 

handled. PBGC received 22 responses. 

Commenters embraced expansion of 

PBGC’s missing participants program to 

accept accounts from terminated DC 

plans and to include those owed money 

in a searchable database of missing 

participants and beneficiaries.2 There 

was broad support for coordination 

among federal agencies on issues related 

to sponsor obligations. Commenters 

urged the need for both flexibility and 

safe harbors. 

In November 2013, the Advisory 

Council on Employee Welfare and 

Pension Benefit Plans (ERISA Advisory 

Council) issued a report 3 on Locating 

Missing and Lost Participants based on 

hearings at which a PBGC staff member 

testified (among other things) about 

responses to PBGC’s RFI. The Advisory 

Council report recommended 

development of effective methods for 

and guidance on searching for missing 

participants, including use of web 

search and commercial locator services. 

It also recommended that, if PBGC 

implemented a missing participants 

program for terminated DC plans, 

compliance with the PBGC program 

should be accorded safe harbor status 

under ERISA. And it urged cooperation 

among federal agencies, in particular to 

develop and implement PBGC’s missing 

participants program. 

On August 14, 2014, the Employee 

Benefits Security Administration 

(EBSA) of the Department of Labor 

(DOL) issued Field Assistance Bulletin 

No. 2014–01 on Fiduciary Duties And 

Missing Participants In Terminated 

Defined Contribution Plans (the FAB).4

The FAB provides guidance about 

required search steps and distribution 

options for benefits of missing 

participants in terminated DC plans. 

Coordination and Consultation 

As recommended by the ERISA 

Advisory Council, PBGC staff consulted 

with EBSA staff and staff at the Solicitor 

of Labor’s Plan Benefits Security 

Division, as well as the Internal 

Revenue Service (IRS) and the 

Department of the Treasury. Those 

consultations were very helpful in 

developing the proposed and final 

regulations. 

In those consultations, the IRS 

informed PBGC that it anticipates a DC 

plan would not fail to be qualified 

solely because it transfers appropriate 

amounts to PBGC in accordance with 

PBGC’s missing participants program 

pursuant to section 4050(a)(2) of ERISA. 

IRS also informed PBGC that, 

consistent with existing treatment of 

transfers to PBGC from terminated 

single-employer DB plans covered by 

title IV of ERISA, amounts transferred 

by terminated DC and other plans to 

PBGC under the expanded missing 

participants program are not taxable 

distributions subject to withholding or 

reporting. 

The Department of Labor advised 

PBGC that it intends to review and 

possibly revise its regulations and 

guidance to coordinate with PBGC’s 

implementation of a final rule on 

missing participants. For instance, the 

Department of Labor indicated its intent 

to review its fiduciary safe harbor 

regulation entitled ‘‘Safe Harbor for 

Distributions from Terminated 

Individual Account Plans,’’ which 

provides for distributions to individual 

retirement plans in such circumstances 

as when the participant or beneficiary 

was furnished a notice but failed to elect 

a form of distribution in a timely 

manner,5 and thus would be considered 

missing under this final rule.6 As part of 

its review, the Department of Labor said 

it specifically intends to consider 

transfers to PBGC appropriate in these 

same circumstances. The Department of 

Labor also indicated its intent to review 

its regulation on Termination of 

Abandoned Individual Account Plans, 

which currently provides for 

distributions generally to individual 

retirement plans in circumstances 

identical to those set forth in the Safe 

Harbor for Distributions from 

Terminated Individual Account Plans.7

Proposed Regulation 

On September 20, 2016, PBGC 

published a proposed regulation (at 81 

FR 64700) to expand the missing 

participants program to terminated 

multiemployer plans covered by title IV 

of ERISA similar to the program for 

covered single-employer plans. The 

proposal also provided for a voluntary 

program for terminated defined 

contribution plans and small 

professional service defined benefit 

plans not covered by PBGC insurance. 

PBGC received 14 written comments on 

the proposal from across the retirement 

community, including comments from 

plan sponsors, third party 

administrators, financial institutions, 

representatives of participants and 

beneficiaries, and participants 

themselves. PBGC adopted a few 

changes in the final regulation in 

response to comments, but the 

regulation is substantially similar to 

what was proposed. An overview of the 

program’s features, the regulation’s 

organization, and the comments and 

PBGC’s responses are discussed below. 

Introduction 

Features of the Program 

This final rulemaking lays the legal 

foundation for a program whose features 

extend far beyond the confines of the 

missing participants regulation. Major 

features of the new program include: 

• A new option for DC plans to deal 

with missing participants and 

beneficiaries when closing out the plan 

and to make it more likely that missing 

persons will receive their benefits. 

• A unified unclaimed pension 

database of information about missing 

participants and their benefits from 

terminated DB and DC plans. 

• A centralized, reliable, easy-to-use 

directory through which persons who 

may be owed retirement benefits from 

DB or DC plans could find out whether 

benefits are being held for them. 

• Robust features to protect private 

information about missing participants 

and their beneficiaries from inadvertent 

disclosure. 

• Periodic active searches by PBGC 

for missing participants. 

• Considerable benefits gained by 

reuniting missing participants with their 

lost retirement money that far outweigh 

the modest costs to plans and 

participants. 

• Provision for a one-time 

administrative fee to be charged for 


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60802 Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Rules and Regulations 

8These are plans that would be described in 

section 4021 of ERISA but for section 4021(b)(1), 

(5), (12), and (13) of ERISA and that could transfer 

benefits to PBGC in money (even if stock were used 

for other purposes) including plans described in 

section 403(b) of the Code under which benefits are 

provided through custodial accounts described in 

section 403(b)(7) of the Code. PBGC’s reading of 

section 4050(d)(4) of ERISA as plausibly 

encompassing certain plans described in section 

403(b) of the Code applies with respect to title IV 

of ERISA only and should not be read to suggest 

that the Internal Revenue Service would interpret 

this language similarly with respect to the 

application of sections 401(a) and 403(b) of the 

Code or for any other purpose under the Code. 

9These are plans that would be described in 

section 4021 of ERISA but for section 4021(b)(13) 

of ERISA. 

10See, S. 3078, the Retirement Savings Lost and 

Found Act of 2016, 114th Congress, which would 

have required the Department of the Treasury and 

the Social Security Administration to create an 

online ‘‘lost and found’’ for missing participant 

accounts. 

plans that transfer missing participants’ 

benefits into the program; no fee for 

benefits of $250 or less, no ongoing 

maintenance fees, and no distribution 

charge. 

• Treating participants or 

beneficiaries as ‘‘missing’’ if they fail to 

make necessary benefit elections upon 

plan termination or fail to accept lump 

sum benefits, such as where there are 

uncashed checks. 

• Fewer benefit categories and fewer 

sets of actuarial assumptions for DB 

plans determining the amount to 

transfer to PBGC and a free on-line 

calculator to do certain actuarial 

calculations. 

• Elimination of unnecessary rules. 

Organization of the Regulation 

While the basic requirements are the 

same across all four types of plans, 

because some terminology and 

processes may vary with each plan type, 

the final regulation is divided into four 

subparts for readability, with each 

subpart describing the requirements for 

one of the four categories of plans. The 

four subparts of the regulation are: 

• A revised version of the existing 

program for single-employer DB plans 

covered by the title IV insurance 

program (subpart A), 

• New requirements for DC plans 

(subpart B),8

• New requirements for small 

professional service DB plans (subpart 

C),9 and 

• New requirements for 

multiemployer plans covered by the 

title IV insurance program (subpart D). 

Each subpart contains seven sections, 

dealing with ‘‘Purpose and scope,’’ 

‘‘Definitions,’’ ‘‘Duties’’ (and options for 

non-PBGC-insured plans), ‘‘Diligent 

search,’’ ‘‘Filing with PBGC’’ (including 

fees), ‘‘Missing participant benefits,’’ 

and ‘‘PBGC discretion.’’ 

Used throughout the regulation is the 

term ‘‘distributee.’’ The regulation that 

is being replaced, following the statute, 

used the phrase ‘‘missing participant’’ to 

refer to either a beneficiary or a 

participant. To reduce possible 

confusion from using the word 

‘‘participant’’ in a phrase that may refer 

to a beneficiary, the final regulation 

(like the proposed) uses the term 

‘‘missing distributee’’ to refer to a 

missing participant or missing 

beneficiary. However, some headings in 

the regulation and some discussion in 

this preamble refer to missing 

participants, the more familiar phrase. 

Discussion of Final Regulation and 

Public Comments 

The public comments focused 

exclusively on the revised rules for 

PBGC-insured single-employer DB plans 

and the new rules for DC plans (which 

are not insured by PBGC). There were 

no comments specific to multiemployer 

plans and non-PBGC-insured small 

professional service DB plans. However, 

because the diligent search rules, benefit 

transfer (pay-in) rules, and rules PBGC 

follows for paying benefits to located 

participants (pay-out rules) are the same 

across all DB plans, changes made to 

those requirements for PBGC-insured 

single-employer DB plans are carried 

over into the requirements for the other 

two types of DB plans. Similarly, 

because the program is voluntary for all 

non-PBGC-insured plans, any changes 

to rules implementing the voluntary 

features for DC plans are carried into the 

same rules for small professional service 

DB plans. 

Scope 

Terminated Plans 

As authorized by the Pension 

Protection Act of 2006 (PPA), this final 

regulation makes PBGC’s missing 

participants program—heretofore 

limited to terminated single-employer 

DB plans covered by title IV’s insurance 

program—available to other terminated 

retirement plans. 

Commenters commended PBGC for 

opening up the missing participants 

program to terminated DC plans in 

particular, and six commenters 

expressed support for going even 

further. They encouraged PBGC to look 

past a plan’s terminated status and 

assert authority to permit ongoing plans 

(particularly ongoing DC plans) with 

missing participants to use the program 

too. 

Commenters explained that whether 

ongoing or terminated, plans face 

challenges handling the benefits of 

participants they can’t locate. Two 

commenters explained that the 

challenges will grow as the number of 

missing participants continues to grow 

along with an increasingly mobile 

workforce, automatic enrollment in DC 

plans, etc. Others stated that PBGC’s 

unclaimed pension search database 

would be more comprehensive if it also 

included information about missing 

participants from ongoing plans. Two 

mentioned legislative efforts in the last 

Congress to create another government 

repository for missing participant 

information and accounts, and noted 

that coordination and inclusion of 

ongoing plans in PBGC’s program could 

discourage duplication, complication, 

and inefficiencies that might follow 

from potential multiple federal 

programs.10 Notwithstanding the 

importance of the issues raised by these 

commenters, such an expansion of the 

program is beyond the scope of this 

rulemaking. 

Voluntary Reporting for DC Plans 

The final regulation, like the 

proposed, provides that PBGC’s missing 

participants program is voluntary for 

terminated non-PBGC-insured plans, 

e.g., DC plans, and that a non-PBGCinsured plan that chooses to use the 

program may elect to be a ‘‘transferring 

plan’’ or a ‘‘notifying plan.’’ A 

transferring plan sends the benefit 

amounts of missing distributees to 

PBGC’s missing participants program. A 

notifying plan informs PBGC of the 

disposition of the benefits of one or 

more of its missing distributees. PBGC 

received comments both supporting and 

opposing this voluntary reporting 

program for DC plans. 

Section 4050(d)(1) of ERISA permits 

but does not require non-PBGC-insured 

plans covered by the program to turn 

missing participants’ benefits over to 

PBGC. Section 4050(d)(2) of ERISA, on 

the other hand, says that (to the extent 

provided in PBGC regulations) nonPBGC-insured plans must upon plan 

termination provide information about 

the disposition of missing participants’ 

benefits that are not transferred to 

another pension plan. PBGC’s 2013 

request for information (RFI) flagged 

this reporting provision for public 

comment. There were some differences 

of opinion on whether reporting should 

be required or just permitted. In general, 

employer advocates considered 

mandatory reporting unnecessarily 

burdensome, while participant 

advocates considered it an essential part 

of an effective pension search program. 

PBGC proposed to begin by making 

participation in the missing participants 


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Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Rules and Regulations 60803 

11Under Code section 414(k), a DB plan that 

provides a benefit derived from employer 

contributions based partly on the balance of a 

participant’s separate account is treated as a DC 

plan for certain purposes and as a DB plan for other 

purposes. 

12See 79 FR 70090 (November 25, 2014); such a 

rollover is discussed in Rev. Rul. 2012–4, 2012–8 

IRB 386. 

13See OMB Circular A–25, User Charges, https:// 

www.whitehouse.gov/omb/circulars_a025. 

program voluntary for such plans. PBGC 

received the same division of comment 

on the proposal as on the RFI. 

Participant advocates denied reporting 

would be burdensome to plans and 

employers since information needed to 

establish an individual retirement 

account (IRA) on behalf of the 

participant should be the same 

information needed to report to PBGC. 

They also continued to support 

mandatory reporting as essential to 

having a complete unclaimed pension 

search database and effective missing 

participants program. Employers, 

practitioners, and financial institutions 

supported a voluntary program to 

ensure that plan fiduciaries continue to 

have options in handling missing 

participant benefits. 

PBGC again considered the comments 

from both sides and decided to maintain 

the direction taken in the proposal—that 

is, to keep reporting voluntary for plans 

not covered by title IV—but to 

reevaluate the decision after plans and 

PBGC gain actual experience with the 

program. That will allow PBGC to use 

experience to determine the need for 

and costs of a mandatory requirement 

weighed against the completeness of the 

unclaimed pension search database. 

Anti-Cherry-Picking for Transferring DC 

Plans 

Under the final regulation, as under 

the proposed, a DC plan that chooses to 

participate in the missing participants 

program and elects to be a transferring 

plan must transfer the benefits of all its 

missing participants into the missing 

participants program. In the preamble to 

the proposal, PBGC stated that it was 

concerned about the possibility of 

‘‘cherry-picking’’—that is, selective use 

of the missing participants program—by 

transferring plans. For example, a plan 

might turn over all its small accounts to 

PBGC, while larger accounts that can 

generate larger maintenance fees for 

commercial individual retirement plan 

providers might be turned over to 

private-sector institutions that charge 

asset-based fees. PBGC proposed that if 

a DC plan voluntarily participates in the 

missing participants program as a 

transferring plan, it may not pick and 

choose the missing distributees whose 

benefits it turns over to PBGC. PBGC 

invited public comment on the validity 

of its concerns about cherry-picking and 

on its proposal for dealing with those 

concerns. 

PBGC received four comments: Three 

supporting the anti-cherry-picking rule 

and one objecting to it. Two supporters 

asserted that the rule would increase the 

number of individuals about whom 

PBGC has information in the unclaimed 

pension search database, making the 

database and overall missing 

participants program more effective, 

with one adding that the rule would 

simplify program administration and 

alleviate participant confusion. Another 

said it did not object if PBGC believes 

such a rule improves the program’s 

ability to succeed. The commenter 

opposing the rule stated the rule is 

inconsistent with, and unnecessary to, a 

voluntary program. In the commenter’s 

experience, the market hasn’t failed to 

adequately handle larger missing 

participant accounts, which can be 

rolled over into IRAs, and some 

commercial providers have routinely 

taken in smaller automatic rollover 

accounts. The same commenter noted 

that the rule in any event may be 

unnecessary because most missing 

participant accounts are small. 

PBGC considered the commenters’ 

arguments. PBGC disagrees that the anticherry-picking rule changes the 

voluntary nature of the program; DC 

plans may participate in PBGC’s missing 

participants program as transferring or 

notifying plans, or not at all. Further, 

the rule ensures that the amount in a 

missing participant’s account, and the 

ability of that account to withstand fees 

charged by IRA providers, aren’t factors 

in whether a plan transfers accounts 

into the missing participants program or 

into IRAs. The rule is consonant with 

section 4050 of ERISA, which does not 

put upper or lower limits on the size of 

the accounts DC plans may transfer into 

the missing participants program. 

Therefore, PBGC has adopted the anticherry-picking rule with respect to 

transferring plans without change in the 

final regulation. 

Scope of DB Plan Program 

The final regulation, like the 

proposed, defines what is a DB plan for 

purposes of the rules under subparts A 

(single-employer), C (small professional 

service), and D (multiemployer). For all 

three types of DB plans, the regulation 

provides that individual account plans 

(DC plans) are not included in the scope 

of the program for DB plans. One 

commenter asked PBGC to clarify that 

the regulation treats ‘‘rollover accounts’’ 

in DB plans like DC plans. 

The IRS regulations under Code 

section 414(l) are instructive in 

responding to this comment. For 

purposes of 26 CFR 1.414(l)–1 (dealing 

with mergers and consolidations), a 

plan is a ‘‘single plan’’ if and only if, on 

an ongoing basis, all of the plan assets 

are available to pay benefits to plan 

participants and beneficiaries. Where a 

plan document provides that a portion 

of the assets is reserved for payment of 

individual account benefits and another 

portion for payment of pension 

annuities, the two portions of the assets 

pertain to two distinct plans. For 

example, see Code section 414(k).11

When a DB plan under section 414(k) of 

the Code terminates, the DB portion and 

the individual account portion must 

each be terminated according to the 

rules associated with each kind of 

benefit. It follows that if the terminated 

plan has missing participants in the DB 

portion, individual account portion, or 

both, the DB portion would follow the 

processes with respect to those missing 

participants under the relevant subpart 

for DB plans, and the individual 

account portion would follow the 

processes under subpart B for DC plans. 

In other cases, a participant may roll 

over a distribution from the 

participant’s DC plan into the same 

sponsor’s DB plan, pursuant to section 

402(c) of the Code, to enable payment of 

a larger annuity benefit under the DB 

plan. These rollovers increase the 

participant’s benefit under the DB plan 

and there is no separate DC account 

maintained in the DB plan.12 If the 

participant is missing upon close-out of 

the plan, for purposes of the missing 

participants program, the entire benefit 

would be treated under the rules for DB 

plans, including how plans calculate the 

benefit and how PBGC pays the benefit 

when the participant is located. 

Fees 

PBGC stated in the preamble to its 

proposed regulation that it will charge 

fees for participation in the missing 

participants program. PBGC received 

five comments on fees, which are 

discussed below. 

PBGC determined in the proposal to 

set fees at levels not to exceed its costs 

to run the missing participants program 

and provide essential services, such as 

periodically looking for participants and 

paying benefits. PBGC’s methodology 

for setting fees under the missing 

participants program would incorporate 

the following elements and principles: 

(1) PBGC would set fees in a manner 

consistent with the requirements of 31 

U.S.C. 9701 and relevant guidance of 

the Office of Management and Budget 13

and the Government Accountability 


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14See GAO reports numbers GAO–12–193, User 

Fees: Additional Guidance and Documentation 

Could Further Strengthen IRS’s Biennial Review of 

Fees, http://www.gao.gov/assets/590/586448.html, 

and GAO–08–386SP, Federal User Fees: A Design 

Guide, http://www.gao.gov/assets/210/203357.pdf. 

15A qualified plan is permitted to require a 

mandatory cash out of a participant’s benefit 

pursuant to section 203(e) of ERISA and section 

411(a)(11) of the Code. 

16See 29 CFR 2550.404a–3 and 2578.1. 

17A missing distributee in a terminated DC plan 

would include a distributee who fails to elect a 

form of distribution in response to a notice meeting 

the requirements of 29 CFR 2550.404a–3. If the 

notice is returned as undeliverable, the DC plan 

administrator must conduct a diligent search that 

meets the requirements of section 404 of ERISA. 

Office.14 Fees would be based on 

PBGC’s costs, the value of the program 

to plans and participants, policy 

considerations (of plans, sponsors, 

practitioners, and participants and 

beneficiaries, encouraging plan 

participation in the program, and with 

due regard for private-sector providers’ 

concerns), and other relevant factors. 

(2) PBGC would set fees with a view 

to collecting, on average and over time, 

no more than its out-of-pocket costs for 

performance of non-governmental 

functions in support of the missing 

participants program. PBGC would not 

seek to recover through fees the value of 

performance of governmental functions 

by government employees. 

(3) PBGC would set fees as one-time 

charges, payable when benefits are paid 

to PBGC, without any obligation to pay 

PBGC continuing ‘‘maintenance’’ fees or 

a distribution fee. Fees would not be 

charged for reporting to PBGC the 

disposition of benefits where no amount 

is transferred to PBGC. 

After considering various fee 

structures, PBGC proposed a flat fee that 

would be simple to understand and easy 

for plans to administer. The fee was 

based on preliminary cost estimates to 

provide services for an estimated 

number of DB and DC missing 

participants coming into the new 

expanded program each year. Based on 

those estimates, PBGC will charge a onetime $35 fee per missing distributee, 

payable when benefit transfer amounts 

are paid to PBGC. There will be no 

charge for amounts transferred to PBGC 

of $250 or less. There will be no charge 

for plans that only send to PBGC 

information about where benefits are 

held (such as in an IRA or under an 

annuity contract). Fees will be set forth 

in the program’s forms and instructions. 

Most of the five commenters agreed 

that $35 is reasonable. Three 

commenters suggested PBGC would 

further increase the value and encourage 

the use of its missing participants 

program by increasing the size of the 

benefit exempt from the fee. 

Commenters suggested a range of benefit 

amounts—from $1,000 or less, to $700 

or $500 or less—to exempt from the onetime fee. The commenter that 

recommended a fee exemption for 

accounts of $1,000 or less suggested, 

alternatively, a tiered fee structure for 

small accounts up to $1,000. Another 

commenter added that plan sponsors 

should pay the fee because they make 

the decisions to terminate plans. 

Whether an expense is properly paid 

by the sponsor or the plan (or charged 

to a participant’s account in the case of 

a DC plan) is an issue outside the scope 

of this rule. With respect to the 

suggestions for raising the benefit 

amount exempt from the fee, the various 

amounts presented show there isn’t 

consensus supporting a fee amount or 

structure different from what PBGC 

initially proposed, and no quantitative 

data to back up one amount over 

another. Therefore, PBGC has decided 

not to change its initial fee structure. 

PBGC will review both the amount of 

the fee and fee structure to determine 

what is appropriate based on PBGC’s 

actual experience with the new program 

and the principles stated herein. 

Concurrently with publication of this 

final regulation, PBGC has posted on its 

website (www.pbgc.gov) forms and 

instructions for the missing participants 

program, which include the statement of 

fees, for which approval by the Office of 

Management and Budget has been 

requested. 

Missing 

Missing—Proposed Regulation 

The proposed regulation provided 

that a distributee is ‘‘missing’’ if, for a 

DB plan, the plan does not know where 

the distributee is on close-out. A DB 

plan distributee also would be missing 

if the distributee’s benefit was subject to 

mandatory ‘‘cash-out’’ under the terms 

of the plan and the distributee failed to 

elect a method of distribution on closeout of the plan.15 For a DC plan, the 

proposal provided that a distributee is 

missing if the distributee failed to elect 

a method of distribution on close-out of 

the plan. 

PBGC distinguished in the proposed 

rule DB plan distributees with benefits 

not subject to mandatory cash-out under 

plan terms, i.e., distributees with a right 

to an annuity. No benefit election is 

generally required of these distributees, 

and absent an election, the distributee’s 

benefit would be annuitized, preserving 

the distributee’s rights and options 

under the DB plan. Accordingly, the 

proposed rule provided that DB plan 

distributees who are not subject to 

mandatory cash out under plan terms 

are missing only if the plan did not 

know where they were. The proposed 

definition of ‘‘missing’’ for DC plans 

followed Department of Labor 

regulations,16 which treat DC plan 

distributees who cannot be found 

following a diligent search similar to 

distributees whose whereabouts are 

known but who do not elect a form of 

distribution.17

Missing—Final Regulation 

The final rule adopts the proposed 

rule’s definition of ‘‘missing’’ for DB 

plans and the proposed rule’s definition 

of ‘‘missing’’ for DC plans, but with 

some refinements. 

The criterion of not knowing the 

whereabouts of a distributee was stated 

expressly for DB plans in the proposed 

rule. It is stated expressly for DB and DC 

plans in the final rule. PBGC also 

reconsidered the language in the 

proposed rule describing the concept of 

a distributee as being missing if the plan 

does not know where the distributee is 

on close-out. If this language were taken 

literally, a plan may never know with 

absolute certainty where a distributee is 

on close-out. The final rule provides 

that one of the conditions for ‘‘missing’’ 

is that the plan does not know ‘‘with 

reasonable certainty’’ (e.g., if a notice 

from the plan to a distributee’s last 

known address was returned as 

undeliverable) the location of the 

distributee on close-out. 

In addition to the above refinements, 

PBGC further modified the definition of 

‘‘missing,’’ and clarified the definition 

in the preamble, in response to several 

comments. Those comments are 

discussed below. 

Uncashed Benefit Checks 

Two commenters recommended that 

PBGC clarify that plans may transfer 

into the missing participants program 

assets being held for distributees who 

do not accept lump sum distributions 

due them, for example amounts held to 

pay uncashed benefit distribution 

checks issued by a terminated plan. 

Under the proposed regulation, a 

distributee was not considered missing 

if the distributee had elected a form of 

distribution upon close-out of the plan. 

This definition would not have 

included a distributee whose benefit 

was being paid from the plan by check 

even if the check subsequently went 

uncashed. 

PBGC considered the commenters’ 

recommendations and modified 

‘‘missing’’ for DB and DC plans in the 


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18A payor or plan administrator may file with the 

IRS to request a refund of tax amounts withheld. 

See IRS Internal Revenue Manual 21.7.2.4.6. 

Adjusted Employer’s Federal Tax Return or Claim 

for Refund. 19 29 CFR 4044.4 Violations. 

final regulation. Under the revised 

definition, a distributee is treated as 

missing if, upon close-out, the 

distributee does not accept a lump sum 

distribution made in accordance with 

the terms of the plan and, if applicable, 

any election made by the distributee. 

For example, if a check issued pursuant 

to a distributee’s election of a lump sum 

remains uncashed after the last date 

prescribed on the check or an 

accompanying notice (e.g., by the bank 

or the plan) for cashing it (the ‘‘cash-by’’ 

date), the distributee is considered not 

to have accepted the lump sum. The 

‘‘cash-by’’ date must be a date that is at 

least 45 days after issuance of the check. 

If there is no such ‘‘cash-by’’ date, the 

lump sum is considered unaccepted if 

the check remains uncashed after its 

stale date. This definition applies 

regardless of whether the lump sum 

distribution was the result of a 

mandatory cash out provision or a 

voluntary election. 

The benefit transfer amount for a 

missing distributee who does not cash a 

distribution check is to be determined 

in the same way as for any other missing 

distributee. The distributee’s benefit 

transfer amount must reflect the total 

value of the benefit without any 

reduction for tax withholding.18 PBGC 

will withhold taxes as appropriate when 

a missing distributee is found and paid. 

However, PBGC believes that there is 

room for flexibility in how the benefit 

is paid to PBGC in circumstances where 

it may not be practical to reflect the total 

value of the benefit in the amount 

transferred. For example, it would be 

permissible for the qualified termination 

administrator (QTA) of an abandoned 

DC plan (as defined under Department 

of Labor regulations at 29 CFR 2578.1) 

to transfer to PBGC the net amount of 

the uncashed check. PBGC believes that 

the final rule’s provision allowing 

discretion to promote the purposes of 

the missing participants program 

provides PBGC with the necessary 

flexibility to accommodate such 

situations. 

PBGC believes this modified 

definition of ‘‘missing’’ for DB and DC 

plans relieves some administrative 

burden on plans trying to complete a 

termination when a distributee’s benefit 

check remains uncashed. And it gives 

distributees some protection by 

allowing transfer of the benefit amount 

to the missing participants program 

where the distributee can search and be 

searched for and retirement benefits 

eventually claimed. 

Conditional Forfeitures 

Two commenters asked PBGC to 

clarify whether participants for whom 

benefits were previously forfeited 

pursuant to Department of the Treasury 

regulation § 1.411(a)–4(b)(6), because 

the plan could not locate them, may be 

treated as missing under the final 

regulation. Treasury regulation 

§ 1.411(a)–4(b)(6) provides that a right to 

a benefit isn’t treated as forfeitable 

‘‘merely because the benefit is 

forfeitable on account of the inability to 

find the participant or beneficiary to 

whom payment is due, provided that 

the plan provides for reinstatement of 

the benefit if a claim is made by the 

participant or beneficiary for the 

forfeited benefit.’’ PBGC believes that 

such a claim to benefits isn’t lost on 

plan termination, and so the final 

missing participants regulation treats 

these individuals the same as any other 

missing participant. Thus, for example, 

in a single-employer DB plan covered by 

title IV of ERISA, the plan must either 

purchase an irrevocable commitment 

from an insurer or transfer the benefits 

to PBGC’s program. In a DC plan, the 

plan may use PBGC’s program as either 

a transferring or notifying plan. PBGC 

takes no position on the permissibility 

of conditional forfeitures under title I of 

ERISA. 

One commenter requested that if the 

final regulation treats these individuals 

as any other missing participant (as it 

does), that PBGC provide transition 

guidance for terminating singleemployer DB plans. The commenter 

stated that some plans may not have the 

records necessary to value the benefit of 

a missing participant whose benefit was 

conditionally forfeited under Treas. Reg. 

§ 1.411(a)–4(b)(6). Because forfeiture is 

conditioned on the right to 

reinstatement if a claim is made for the 

benefits, the plan necessarily should 

have the records to determine the 

benefits the plan must reinstate if a 

participant makes a claim. PBGC 

therefore assumes plans will have such 

records. PBGC would expect to deal 

with defects in such records as it would 

with defects in any records on a caseby-case basis. 

PBGC also recognizes that QTAs of 

abandoned DC plans for which there is 

no plan sponsor may not be able to 

reinstate benefits if there have been 

conditional forfeitures. As stated 

elsewhere with respect to abandoned 

DC plans, PBGC believes that the final 

rule’s provision allowing discretion to 

promote the purposes of the missing 

participants program provides flexibility 

to accommodate this situation if it 

arises. 

DB Plan De Minimis Benefits Rolled 

Over Into IRAs 

As stated above, the final regulation 

modifies the existing definition of 

‘‘missing’’ for DB plans to include a 

non-responsive distributee, i.e., a 

distributee whose benefit is to be paid 

as a lump sum and who has not 

responded to a notice about the 

distribution of the distributee’s benefit, 

or has not accepted the distribution, 

upon close-out of the plan. Two 

commenters requested that PBGC clarify 

how it will treat a distributee’s benefit 

that was subject to mandatory cash-out 

under the plan and rolled over into an 

IRA around the time of the plan’s 

termination. Commenters questioned 

whether terminating single-employer 

DB plans that have rolled over 

mandatory cash-out amounts to IRAs 

could be required to recover those 

amounts and transfer them into the 

missing participants program. 

Distributions made in contemplation 

of plan termination but before the 

formal commencement of termination 

proceedings under title IV of ERISA 

have been a matter of concern to PBGC 

because those to whom such 

distributions are made do not receive 

the protections that the termination 

process is designed to give distributees 

on termination. Transfers made just 

before the formal commencement of 

termination proceedings in a form that 

would be improper for a transfer upon 

plan termination deserve particular 

scrutiny. If such a distribution were 

found to be in violation of title IV,19 the 

appropriate remedy might be to reverse 

it. 

In general, however, distributions 

made by an on-going DB plan in 

accordance with plan provisions and 

consistent with the plan’s pretermination practices would not be 

swept into the termination process. 

‘‘Distributee’’ under this final rule refers 

to a person entitled to a distribution 

pursuant to close-out of a plan. 

Someone whose benefit is rolled over to 

an IRA before plan termination is not 

entitled to a distribution pursuant to 

close-out because the benefit has 

already been distributed. The final rule 

does not contemplate the undoing of 

pre-termination rollovers. 

Diligent Search 

Whom To Search For 

As discussed under Missing, some 

distributees may be considered 


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60806 Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Rules and Regulations 

20A distribution generally is permitted under the 

Department of Labor’s safe harbor regulation with 

no additional search beyond the notification sent to 

the last known address of the participant or 

beneficiary in accordance with the requirements of 

29 CFR 2520.104b–1(b)(1). If a notice is returned to 

the plan as undeliverable, the plan fiduciary must, 

consistent with its duties under section 404(a)(1) of 

ERISA, take steps to locate the participant or 

beneficiary and provide notice before making the 

distribution. See EBSA’s FAB 2014–01 for guidance 

on search steps. 

21Under the existing regulation, the diligent 

search rules for single-employer DB plans covered 

by title IV imposed three requirements: Timeliness, 

seeking information from beneficiaries of a missing 

participant, and use of a commercial locator service. 

‘‘missing’’ because they are nonresponsive, without regard to whether 

their plan knows with reasonable 

certainty their location. If a plan does 

indeed know where a non-responsive 

distributee is, there is clearly nothing to 

be gained by a diligent search for that 

distributee. 

The proposed rule provided that a 

diligent search was required for every 

missing participant, but contained a 

proviso (in the section on plan duties) 

that a diligent search was not required 

for a missing distributee if the plan 

knew where the distributee was. PBGC 

concluded that this way of expressing 

the applicability of the diligent search 

requirement was potentially confusing. 

Accordingly, PBGC in the final rule in 

both the section on plan duties and the 

section on diligent search states that 

diligent searches are required only for 

missing distributees whose location the 

plan doesn’t know with reasonable 

certainty. 

As in the proposed rule, whether a 

distributee is considered missing 

depends on the distributee’s status upon 

close-out; and likewise, whether a plan 

knows with reasonable certainty a 

missing distributee’s whereabouts, for 

purposes of the diligent search 

requirement, is determined as of closeout. 

Diligent Search Methods for DC Plans 

The final regulation, like the 

proposed, provides that a DC plan must 

search for each missing distributee 

whose location the plan does not know 

with reasonable certainty. The plan 

must search in accordance with 

regulations and other applicable 

guidance issued by the Secretary of 

Labor under section 404 of ERISA. 

Compliance with that guidance satisfies 

PBGC’s ‘‘diligent search’’ standard for 

DC plans.20 PBGC received several 

comments on this topic, with two 

commenters specifically commending 

PBGC for harmonizing the DC program 

with search guidance already 

established by the Department of Labor 

and followed by terminated plans. 

Another commenter recommended 

PBGC incorporate specific search 

methods into the final regulation (much 

the same as for DB plans). In that way, 

PBGC, as the agency administering the 

missing participants program, would 

have control over the search methods 

used to meet the diligent search 

standard. The same commenter 

recommended that the Department of 

Labor in turn harmonize its search 

guidance for DC plans with PBGC’s 

diligent search standard. Another 

commenter recommended waiving use 

of a commercial locator service to find 

a participant with an account balance of 

less than $200 as fees for locator 

services can be charged to DC plan 

accounts and may reduce small 

accounts by large percentages. 

Harmonization is the hallmark of the 

DC plan missing participants program. 

The ERISA Advisory Council in its 2013 

report (see the discussion above in 

Background) urged cooperation among 

federal agencies to develop and 

implement the missing participants 

program. Commenters to the RFI also 

urged agreement in guidance and rules 

from the Department of the Treasury 

(and Internal Revenue Service), the 

Department of Labor’s Employee 

Benefits Security Administration 

(EBSA), and the Pension Benefit 

Guaranty Corporation that affect 

searching for and distributing the 

benefits of missing participants. 

Guidance from EBSA on searching for 

missing participants of terminated DC 

plans has been available since 2004 and 

was updated in 2014. The Department 

of Labor’s (DOL’s) regulatory safe harbor 

for terminated plans was effective in 

2006. Noting the existing fiduciary 

guidance on search requirements for 

terminated DC plans, PBGC determined 

that double search standards established 

by two agencies applicable to one type 

of plan (DCs) would create unnecessary 

administrative burden and confusion for 

plans, service providers, and 

participants. PBGC therefore adopts in 

the final regulation without change the 

provision that compliance with DOL’s 

fiduciary search guidance satisfies 

PBGC’s diligent search standard. 

As for waiving use of a commercial 

locator service, EBSA has advised PBGC 

that use of a commercial locator service 

is not necessarily required for DC plans. 

As explained in FAB 2014–01, a plan 

fiduciary at a minimum should take 

certain steps to find a participant. If 

those steps fail, ERISA’s duties of 

prudence and loyalty require the 

fiduciary to consider if additional 

search steps are appropriate. In making 

this determination, the fiduciary should 

consider the size of the participant’s 

account balance and cost of further 

search efforts. As a result, the specific 

additional steps that a plan fiduciary 

takes to locate a missing participant may 

vary depending on the facts and 

circumstances. Possible additional 

search steps include the use of internet 

search tools, commercial locator 

services, credit reporting agencies, 

information brokers, investigation 

databases and analogous services that 

may involve charges. 

Unknown Beneficiary of a Deceased DC 

Plan Participant 

As noted in the preamble to the 

proposed regulation, where a DC plan 

knows a participant is deceased and has 

no known beneficiary, the unknown 

beneficiary is a distributee under the 

missing participants program. In the 

context of an abandoned DC plan (as 

defined under Department of Labor 

regulations at 29 CFR 2578.1), one 

commenter asked for clarification on 

how to handle benefits where a 

beneficiary can’t be determined based 

on available information. The 

commenter said that a QTA of an 

abandoned plan particularly may not 

have adequate information to determine 

beneficiaries as the QTA may not have 

been the plan’s contractor for services 

such as maintaining beneficiary 

designations or providing qualified 

domestic relations order (QDRO) 

review. 

PBGC expects that there will be 

instances where a DC plan knows a 

participant is deceased but has little or 

no information about a beneficiary. 

Where an unknown beneficiary of a 

deceased participant is missing, as 

defined in the final regulation, the 

account balance of the deceased 

participant may be transferred into the 

missing participants program. PBGC 

will take into account the fact that there 

is no known person to search for in 

evaluating the plan’s fulfillment of the 

diligent search requirement for any such 

distributee. Plan fiduciaries and QTAs 

would file in accordance with the forms 

and instructions for DC plans what 

information they have about the 

participant and beneficiary. See the 

section on Filing with PBGC, below, 

about flexibilities in filing for 

abandoned DC plans. 

Diligent Search Methods for DB Plans 

The search standard for DB plans in 

the proposed regulation was based on 

the requirements in the existing 

regulation with modifications inspired 

by the guidelines in EBSA’s FAB.21 The 

proposed standard listed five specific 

search methods. The first three were to 


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Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Rules and Regulations 60807 

seek information from records of the 

plan that is closing out, from the 

employer, and from other plans of the 

employer (including health plans), and 

to mine these sources for information to 

locate the missing individual as well as 

leads to beneficiaries. The fourth 

method was to use a no-fee internet 

search engine or database, and the fifth 

was to use a commercial locator service 

as specifically defined in the regulation. 

PBGC received several comments on the 

proposed DB plan diligent search 

requirement, which are described 

below. 

While PBGC’s proposed regulation 

attempted to bring its existing search 

rules into closer alignment with the 

search guidance in the FAB, PBGC 

believed that DB plans would welcome 

a more explicit and concrete ‘‘checklist’’ 

of steps as outlined in the proposal. 

PBGC sought comment on whether DB 

plans would be better served by a 

different or less prescriptive search 

standard. The one response affirmed 

PBGC’s belief that a more explicit 

checklist for DB plans is warranted. 

Therefore the final regulation, like the 

proposed, retains this structure. 

PBGC also invited comment on 

searching using a commercial locator 

service. The proposed regulation gave 

meaning to what is a commercial locator 

service for purposes of a diligent search 

to ensure a more robust, but also 

necessarily more expensive search, 

which might not be cost-effective for 

distributees with relatively small 

benefits. PBGC proposed to address this 

issue by reserving to itself the authority 

to place limits in the missing 

participants forms and instructions on 

the requirement for DB plans to use a 

commercial locator service. PBGC asked 

whether a waiver should be based on 

the monthly amount of a distributee’s 

benefit or the present value of the 

benefit or on some other criterion, and 

on whether the waiver should be 

codified in the regulation. 

In response, two commenters said 

they supported waiving use of the 

commercial locator service method for 

certain DB distributees and codifying 

such waiver. One commenter suggested 

a waiver for small plans (not small 

benefits) with fewer than 500 

participants because a locator service 

may not be cost-effective for these plans. 

Another suggested a waiver for monthly 

annuity benefits of less than $100. One 

of these commenters added that 

codification would give plans notice 

that a waiver is available and if a waiver 

is subsequently changed. 

PBGC considered the commenters’ 

feedback and re-structured the final 

regulation so that a DB plan need not 

use the commercial locator service 

method for a distributee with a very 

small monthly benefit. The final 

regulation provides that a plan 

administrator must have diligently 

searched for a missing distributee using 

one of two search methods: A 

commercial locator service or, as an 

alternative for a distributee with a very 

small benefit, i.e., a distributee whose 

normal retirement benefit is $50 or less 

per month, the ‘‘records search 

method.’’ PBGC did not draw the line at 

plan size, as recommended by one 

commenter, because small plans may 

have distributees with large benefits. 

With more at stake, more expense is 

justified. In contrast, the smaller the 

benefit, the weaker the justification for 

requiring use of an expensive search 

method. Therefore, the final regulation 

provides that DB plans can choose to 

use, instead of a commercial locator 

service, a potentially less costly search 

method (the ‘‘records search method’’) 

for a participant with a very small 

benefit. 

The ‘‘records search method’’ 

includes the following steps: Searching 

the records of the plan that is closing 

out, of the employer, and of each 

retirement or welfare plan of the 

employer, for information to locate the 

distributee; contacting each beneficiary 

of the distributee identified from the 

records; and using an internet search for 

which no fee is charged, such as a 

search engine, a network database, a 

public record database (such as those for 

licenses, mortgages, and real estate 

taxes) or a ‘‘social media’’ website. 

PBGC received comments on two 

search steps in the proposal that are 

now part of the final rule’s ‘‘records 

search method’’—searching using no-fee 

internet search engines and databases, 

and searching employer records. 

Regarding no-fee internet searches, 

one commenter recommended that a 

plan that has used a commercial locator 

service but has not found a distributee 

be permitted to skip a no-charge internet 

search for that distributee. The 

commenter argued that no-fee internet 

searches are unwieldy for plans with 

large numbers of missing participants 

and that search results can be hard to 

verify. As stated above, the final 

regulation provides that a DB plan must 

have diligently searched for a 

distributee who is missing upon closeout using only one of two search 

methods, a commercial locator service 

or the ‘‘records search method.’’ If a DB 

plan uses a commercial locator service 

and does not locate the distributee, 

regardless of whether the benefit is large 

or small, no further searching is 

required. Similarly, if the ‘‘records 

search method’’ does not locate the 

distributee with a very small benefit, no 

further searching is required. 

Two commenters recommended that 

PBGC modify or eliminate a search of 

the records of the employer that last 

employed the distributee and 

maintained the plan, claiming that this 

search could be more burdensome than 

useful. One commenter’s suggestion was 

to limit the period for searching to the 

last employer that employed the 

participant within the previous 12 

months. Another suggested the method 

should be optional to account for 

situations where a plan is acquired by 

another employer and the missing 

participant is a terminated vested 

participant of the former sponsor. In this 

case, the former sponsor is unlikely to 

have kept records on the separated 

employee. 

PBGC considered the potential burden 

and fruitfulness of records searches that 

could go back many years or require 

searching the records of another 

employer. To that end and to keep the 

cost of the ‘‘records search method’’ in 

general reasonable, the final regulation 

provides that its requirements (e.g., 

searching the records of the employer 

(the contributing sponsor) that most 

recently maintained the plan and 

employed the distributee) apply only to 

the extent reasonably feasible and 

affordable. Searching is not affordable to 

the extent that the cost (including the 

value of labor) is more than a reasonable 

fraction of the benefit of the distributee 

being searched for. What is reasonable 

is a matter of judgment and plan 

fiduciaries are familiar with 

reasonableness requirements. See for 

example ERISA section 404(a)(1)(A)(ii). 

Spending more to search for a 

distributee than the value of the 

distributee’s benefit would seem clearly 

unreasonable. Searching is not feasible 

to the extent that it is thwarted by legal 

or practical lack of access to records. 

All these requirements are designed to 

support the basic function of a diligent 

search—to demonstrate that an 

appropriate level of effort has gone into 

finding a person who remains missing. 

To that end, plan administrators are 

expected to the extent possible to search 

using as much information about a 

distributee as possible, such as name, 

social security number, date of birth, 

and last known address. As one 

commenter explained, searches using 

multiple data points reduce false 

positives and oversized search results, 

producing a more effective search. 

A plan (DB or DC) that uses PBGC’s 

missing participants program to provide 

for the benefits of, or to provide 

information about the disposition of 


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60808 Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Rules and Regulations 

22Section 4050 of ERISA describes three benefit 

categories: ‘‘de minimis’’ benefits that a plan could 

lawfully cash out without consent; benefits payable 

only as annuities; and benefits for which a lump 

sum is elective. A plan is to use its own lump sum 

assumptions to value benefits in the first category; 

PBGC missing participant assumptions for those in 

the second category; and for the third category, 

whichever of the two sets of assumptions produces 

the greater present value. 

23Under the existing regulation, benefits actually 

subject to mandatory cash-out under plan terms are 

to be valued using plan assumptions. Benefits that 

could be involuntarily cashed out under the law but 

not under plan terms are to be valued using the 

‘‘missing participant lump sum assumptions.’’ 

Benefits not subject to either voluntary cash-out 

under the plan or mandatory cash-out under the 

statute are to be valued using the ‘‘missing 

participant annuity assumptions.’’ Finally, benefits 

that could not be involuntarily cashed out under 

the law but for which a lump sum option is 

available are to be valued using either the ‘‘missing 

participant annuity assumptions’’ or plan 

assumptions, whichever produces the greater value. 

Among missing participants whose benefits are 

transferred to PBGC under the current program, 

about 87 percent have benefits that are de minimis 

under plan or PBGC assumptions. 

24Special ‘‘XRA’’ rules would apply to pay-status 

distributees and non-participant distributees. 

benefits for, a person whose 

whereabouts are unknown, must have 

followed the diligent search 

requirements and failed to locate the 

participant. 

Diligent Search Timeframe 

Under the proposed regulation, a 

diligent search must have been 

completed within six months before the 

last distribution to a non-missing 

distributee (if the plan is sending 

information to PBGC) or within six 

months before the date the benefit is 

transferred to PBGC’s program. One 

commenter recommended allowing a 

period longer than six months to do a 

diligent search. Experience shows that 

missing distributees can be found, and 

it is more efficient—and typically more 

advantageous for the distributee—to be 

found before close-out, so that benefits 

can be distributed in the normal 

manner. The fact that a distributee 

could not be found in the past does not 

mean that the distributee is forever lost. 

PBGC thus believes that diligent 

searches should be relatively recent. But 

after considering the comment, PBGC 

has concluded that nine months—rather 

than the six months provided in the 

proposal—is a reasonable time frame for 

a diligent search. 

As stated above, the proposed 

regulation measured the diligent search 

period from a different date depending 

on whether PBGC received money or 

just information about a missing 

distributee. PBGC believes different 

dates aren’t necessary and may be 

unworkable, for example if a plan has 

only missing distributees. So, the final 

regulation uses the same date for all 

cases. The nine-month period ends 

when the distributee is identified as 

missing in a filing with PBGC. 

Amounts To Be Transferred 

DC Plan Pay-In Rules 

The amount to be transferred to PBGC 

on behalf of a missing distributee—the 

‘‘benefit transfer amount’’—is relatively 

simple for DC plans: It is the amount 

available for distribution to the 

distributee in connection with the closeout of the plan. PBGC received no 

comments on its proposed definition of 

benefit transfer amount for DC plans, 

and the final regulation follows the 

proposed in this regard. For a missing 

distributee who was a participant, the 

benefit transfer amount would generally 

be the participant’s account balance, but 

might not be if (for example) a qualified 

domestic relations order (QDRO) 

required distribution of a portion of the 

account to another person. The benefit 

transfer amount for a DC plan missing 

distributee also might (but might not) 

reflect the deduction of expenses. PBGC 

will not inquire into whether an account 

balance has been reduced for 

administrative expenses before it was 

transferred to PBGC. Whether plan 

termination expenses were properly 

allocated among all plan participants by 

the plan’s fiduciary before the transfer is 

beyond the scope of this regulation. 

DB Plan Pay-In Rules—Proposal 

For DB plans, the proposed regulation 

provided that the amount to be 

transferred to PBGC is the ‘‘benefit 

transfer amount’’ of a missing 

distributee (and a ‘‘plan make-up 

amount’’ if applicable). The benefit 

transfer amount would be the present 

value of future payments of an annuity. 

The proposed valuation rules for 

determining the benefit transfer amount 

represented a significant departure from 

the existing valuation rules (for benefits 

from single-employer plans covered by 

title IV insurance). The proposal 

abandoned a four-category approach to 

valuing benefits in the existing 

regulation in favor of a leaner threecategory approach consistent with that 

of the statute.22 The four benefit 

categories under the existing regulation 

were arrived at by breaking the first 

statutory category into two: Benefits 

actually subject to mandatory cash-out 

under plan terms, and benefits that 

could be involuntarily cashed out under 

the law but not under plan terms. The 

existing regulation prescribed three sets 

of assumptions: Plan lump sum 

assumptions and two sets of PBGC 

missing participant assumptions 

(‘‘missing participant lump sum 

assumptions’’ and ‘‘missing participant 

annuity assumptions).’’ 23 Whichever 

assumptions were used, the existing 

regulation specified that they were to be 

applied to the most valuable benefit. 

Thus, the plan had to value each benefit 

separately for a starting date in each 

year out into the future in order to find 

the most valuable one. 

In addition to discarding the fourcategory approach to benefit valuations, 

PBGC proposed to abandon the 

‘‘missing participant lump sum 

assumptions’’ and to modify the 

‘‘missing participant annuity 

assumptions’’ (which were closer to 

termination assumptions in PBGC’s 

regulation on Allocation of Assets in 

Single-Employer Plans (29 CFR part 

4044)) into a new, single set of ‘‘PBGC 

missing participant assumptions.’’ The 

proposed ‘‘PBGC missing participant 

assumptions’’ included no adjustment 

for expenses—neither the adjustment 

that is part of the 4044 assumptions nor 

the load that is part of the missing 

participant annuity assumptions in the 

existing regulation. Mortality and 

interest under the proposed new 

assumptions were to be the same as 

under the existing old assumptions, 

except that the interest assumption in 

effect for valuations in January would be 

used for the entire calendar year. 

Also under the proposal, preretirement death benefits were to be 

disregarded and the benefit to be valued 

was to be a straight life annuity 

beginning at the expected retirement age 

(XRA).24 Using XRA avoided the 

requirement to value the benefit at every 

age to determine the most valuable 

benefit and made the new assumptions 

more like the 4044 assumptions. 

A plan that pays no lump sums (even 

for de minimis amounts) would have no 

‘‘plan assumptions’’ for lump sums. 

Under the existing regulation, such 

plans used ‘‘missing participant lump 

sum assumptions’’ to value all benefits 

that could lawfully be cashed out. With 

the elimination of the ‘‘missing 

participant lump sum assumptions’’ and 

the associated benefit valuation 

category, the proposed regulation 

provided that such plans should use 

assumptions specified under section 

205(g)(3) of ERISA and section 417(e)(3) 

of the Code (dealing with determination 

of the present value of certain benefits). 

Benefits were to be valued as of the 

date the benefit transfer amount was 

paid to PBGC (the ‘‘benefit transfer 

date’’). PBGC invited comment on this 

point. Valuing benefits as of the benefit 

transfer date would eliminate the need 

for the rules in the existing regulation 

about interest on transfers to PBGC 


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between the valuation date and the 

payment date, since those two dates 

would be the same. 

Plans were to account separately for 

the value of benefits payable in the 

future (the ‘‘benefit transfer amount’’) 

and the value of benefit payments 

missed (or treated as missed) in the past 

(the ‘‘plan make-up amount’’). The 

value of a missed payment would be the 

accumulated value of the payment 

(reflecting interest from the date the 

payment was due to the date of the 

plan’s payment to PBGC), without 

reduction for mortality—that is, on the 

assumption that the annuitant was alive. 

Interest was to be calculated in the same 

way as for underpayments of guaranteed 

benefits by PBGC under PBGC’s 

regulation on Benefits Payable in 

Terminated Single-Employer Plans (29 

CFR part 4022) using the Federal midterm rate described in section 1274(d) of 

the Code with monthly compounding. 

PBGC was to use the same interest 

assumption for crediting interest 

between the date of receipt of a payment 

from a plan and the date of payment of 

a lump sum by PBGC. This rate, to be 

called the ‘‘missing participants interest 

rate,’’ is the same rate prescribed in the 

existing missing participants regulation 

as the ‘‘designated benefit interest rate.’’ 

The proposed plan make-up amount 

was to include not only missed 

payments to distributees who became 

missing after they had begun to receive 

benefit payments, but also payments not 

made after the required beginning date 

under section 401(a)(9)(C) of the Code, 

regardless of which assumptions (PBGC 

or Plan) were used to determine the 

transfer amount. 

DB Plan Pay-In Rules—Final; Benefit 

Determination Date 

PBGC received three comments 

dealing with determining the value of 

benefits as of the benefit transfer date. 

One appreciated the clarity and 

consistency of valuing benefits as of the 

benefit transfer date as proposed. But 

two commenters expressed concern that 

the proposal would create undue 

complications and additional work 

where the actual transfer took place 

after the anticipated close-out date, 

especially with respect to lump sums. 

Commenters noted that plans determine 

the lump sum amounts payable to 

participants as of an assumed payment 

date, generally the anticipated close-out 

date. However, in some cases, a plan 

might not know that a participant is 

missing at the time the calculations are 

done. If the plan finds out that someone 

is missing after the fact, the actual 

benefit transfer date might be a month 

or two later than originally anticipated 

(i.e., not the assumed date used to 

determine the lump sum amount). In 

such situations, the proposal would 

seem to require that the plan recalculate 

the missing participant’s benefit transfer 

amount on the participant’s actual 

benefit transfer date, which adds cost 

and burden to the termination process. 

In addition, one commenter said that 

recalculation using a much-later-thananticipated benefit transfer date could 

affect whether a participant is still 

subject to mandatory cash-out and 

treated as missing. 

Commenters recommended PBGC 

apply either a 30-day grace period 

during which no adjustment to the 

benefit transfer amount is required, or 

essentially go back to the existing rule 

under which interest is owed if payment 

to PBGC is made significantly after the 

assumed payment date underlying the 

calculation of the benefit transfer 

amount. 

In response, the final regulation 

departs significantly from the proposed, 

with a view to reducing burden and 

simplifying the procedures DB plans 

must follow. The benefit transfer date is 

replaced by a benefit determination 

date. The benefit transfer amount will 

be determined as of the benefit 

determination date and will not change 

even if it is paid to PBGC on a later date. 

When paying lump sums, PBGC will 

pay a participant the value of the 

participant’s benefit plus interest for the 

full period from the date as of which the 

benefit was valued by the plan to the 

date PBGC pays the participant. But for 

administrative convenience, PBGC will 

allow DB plans a 90-day grace period 

from the benefit determination date 

before it collects interest for amounts 

not yet transferred. However, if payment 

is more than 90 days after the benefit 

determination date, interest at the 

Federal mid-term rate will be owed for 

the period after 90 days through the 

actual transfer date. (For a DC plan, the 

benefit determination date is the same 

as the date the plan pays PBGC, because 

the plan simply pays PBGC the amount 

in the account on that date.) 

The benefit determination date will be 

selected by the plan subject to the 

limitation that it be within the period 

from the first distribution to a nonmissing distributee to the last such 

distribution. 

DB Plan Pay-In Rules—Final; Reported 

Amounts 

While the proposed regulation 

recognized that benefits must begin no 

later than the required beginning date 

under section 401(a)(9)(C) of the Code, 

it did not consider that some plans do 

not actuarially increase benefits for 

terminated vested participants that 

commence after normal retirement date 

and instead provide a lump sum to 

account for the accumulated value of 

benefits that weren’t paid from normal 

retirement date to the benefit 

commencement date. For such plans, 

the proposal had a few shortcomings. 

For example, with respect to a missing 

participant under age 55 with a non-de 

minimis benefit, the proposal 

anticipated that a plan would be 

required to report the monthly straight 

life annuity payable at each integral age 

from 55 through the required beginning 

date. When the participant was located, 

the annuity PBGC would have provided 

would have been based on those 

reported amounts. For a plan that 

doesn’t actuarially increase benefits 

after normal retirement age, the amounts 

reported to PBGC would have been the 

same at each age from normal retirement 

date through required beginning date, so 

the monthly benefit PBGC would have 

provided had the participant been 

located and commenced payment after 

normal retirement age would have been 

the same as if the participant had 

commenced payment at normal 

retirement date. Since there was no 

‘‘pay-out’’ provision to account for 

missing payments before the required 

beginning date in the proposal, that 

participant would have been 

shortchanged. 

To take plans of this type into account 

while still having a simplified approach 

that works for all DB plans, the final 

regulation modifies the pay-out rules for 

post-normal retirement age start dates, 

and the methodology for determining 

benefit transfer amounts using ‘‘PBGC 

missing participant assumptions,’’ for 

non-pay status participants past normal 

retirement age (with a corresponding 

change in the filing requirements). 

Under the revised approach, a plan is 

required to report the monthly straight 

life annuity payable at each integral age 

from 55 through the normal retirement 

date (or in some cases accrual cessation 

date as explained below). When the 

participant is located, the annuity PBGC 

provides is based on those reported 

amounts (with missed payments paid as 

a lump sum with interest). With this 

approach, participants whose benefits 

aren’t actuarially increased after normal 

retirement date aren’t short-changed, 

and neither are participants who 

accrued benefits after normal retirement 

date. 

DB Plans—Final; Normal Retirement 

Date and Accrual Cessation Date 

As stated above, the normal 

retirement date, or if later, the date the 

participant stopped accruing benefits 


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60810 Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Rules and Regulations 

25PBGC would interpolate where necessary to 

obtain figures for fractional ages. 

(i.e., ‘‘accrual cessation date’’) replaces 

the required beginning date. 

In the proposal, for purposes of 

determining the present value of future 

benefits using PBGC missing participant 

assumptions, the assumed benefit start 

date (for determining the annuity to 

value) for a participant past normal 

retirement date but not yet past required 

beginning date, was the benefit transfer 

date and for a participant past required 

beginning date, the required beginning 

date. In the final rule, the assumed 

benefit start date for a participant past 

normal retirement date is generally the 

normal retirement date. However, to 

account for situations where a non-pay 

status missing participant accrued 

benefits after the plan’s normal 

retirement date, the final rule provides 

that the assumed benefit start date in 

this situation is the date the participant 

ceased accruals. (The final rule does this 

to ensure that the annuity PBGC will 

provide to such a missing participant 

when found is no less than what the 

plan would have provided.) 

With respect to participants not yet 

past normal retirement age, participants 

in pay status, and beneficiaries, the final 

rule retains the assumed benefit start 

date provisions from the proposed 

regulation for purposes of determining 

pay-in amounts. 

In summary, under the final pay-in 

rules, the assumed benefit start date for 

purposes of the PBGC missing 

participant assumptions is: 

• The expected retirement age (XRA) 

in PBGC’s valuation regulation, for a 

participant not in pay status who has 

not reached normal retirement date; 

• The normal retirement date (or 

accrual cessation date if later), for a 

participant not in pay status who has 

reached normal retirement date; 

• The actual benefit start date, for a 

participant in pay status; and 

• For a beneficiary, the later of the 

benefit determination date or the 

earliest date the beneficiary could 

receive benefits under the plan. 

PBGC has created an on-line 

spreadsheet that will calculate the 

present value of a missing participant’s 

benefit expected to be paid on or after 

the benefit determination date with the 

new PBGC missing participant 

assumptions. A person would simply 

enter data, such as eligibility for early 

and unreduced retirement and benefit 

amounts, and the spreadsheet would do 

the calculations—including XRA 

calculations—necessary to determine 

the present value of benefits, thus 

making the new PBGC missing 

participant assumptions easier to use. 

Except for making the change from 

required beginning date to normal 

retirement date (or accrual cessation 

date if later), the final regulation retains 

the other PBGC missing participant 

assumptions in the proposed regulation 

(e.g., mortality, interest, form of 

payment). 

DB Plans—Final; Missed Payments 

Under the proposed regulation, the 

amount transferred to PBGC for some 

distributees—those in pay status or past 

the required beginning date—included 

both the benefit transfer amount and a 

‘‘plan make-up amount,’’ representing 

payments that should have been made 

but were missed. The plan make-up 

amount accumulated the missed 

payments with interest at the Federal 

mid-term rate. In reconsidering its 

proposal as described above, PBGC 

found itself questioning whether the 

proposed manner of valuing missed 

payments, and the requirement to 

include it in the amount transferred, 

was appropriate in situations where 

benefits are valued using plan lump 

sum assumptions. For example, if a plan 

determines lump sum amounts for 

participants past normal retirement age 

as the present value of an actuarially 

increased benefit, there is no need for a 

plan make up amount (i.e., the value of 

post-normal retirement age missed 

payments is built into the present value 

calculation). In addition, it seems 

unlikely that plans generally would use 

the Federal mid-term rate to accumulate 

missed payments in calculating lump 

sums. Accordingly, PBGC in the final 

regulation has revised how the benefit 

transfer amount is determined for 

calculations based on plan lump sum 

assumptions to provide that missed 

payments are to be valued in whatever 

way the plan would ordinarily value 

them. 

Thus, the term ‘‘plan make-up 

amount’’ is eliminated. However, the 

concept is retained for calculations 

determined using PBGC missing 

participant assumptions. For those 

calculations, the amount of missed 

payments with interest is added to the 

present value of future benefits to yield 

the benefit transfer amount. 

Filing With PBGC 

What To File 

The proposed regulation specified 

certain items to be filed for each missing 

distributee, such as the benefit transfer 

amount or information about where the 

missing distributee’s benefit is being 

held, diligent search documentation and 

other information, fees, and 

certifications. 

There was some support among the 

comments for documentation of diligent 

searches, and PBGC considered this 

matter in developing the final 

regulation. With a view primarily to 

reducing burden, PBGC decided that it 

would not initially require that a plan 

submit specific documentation of 

diligent searches with its filing, since 

compliance with the regulation 

(including the performance of diligent 

searches) must be certified on the form. 

PBGC might revisit this decision if it 

appears necessary to encourage 

compliance with the diligent search 

requirements. 

PBGC decided further to make the 

regulation less specific about 

documentation generally. PBGC 

realized, for example, that information 

would be required not just for each 

missing distributee (as the proposed 

regulation said) but also for the filing 

plan. Rather than trying to be more 

inclusive about data to be filed, the final 

rule simply refers to the missing 

participant forms and instructions for 

data required. The final rule does, 

however, list the three types of 

payments required: fees, benefit transfer 

amounts, and interest on the latter (for 

DB plans, if owed). And it retains the 

supplemental filing requirement from 

the proposed regulation for a plan to 

submit additional information if PBGC 

requests. But the nature of supplemental 

information that may be requested is 

more generally stated. 

Not within the scope of this rule are 

documentation, recordkeeping and 

other requirements of plans and plan 

terminations elsewhere under ERISA 

and the Code. While PBGC as 

administrator of the title IV insurance 

program can and will audit ERISA title 

IV plans (such as single-employer DB 

plans under a standard termination), 

such other requirements for non-title IV 

plans are properly subject to the audit 

and enforcement mechanisms under 

title I of ERISA and the Code for 

ensuring that terminations are properly 

carried out. 

Forms and Instructions 

The missing participants forms and 

instructions for DB plans require the 

reporting of the monthly amount of each 

missing participant’s accrued benefit (if 

not de minimis) in straight-life form 

assuming commencement at each 

integral age going forward from the later 

of the benefit determination date or age 

55 to the normal retirement date (or 

accrual cessation date if later).25

Because of the change in the final rule 

from the required beginning date to the 

normal retirement date as the last date 


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26See, FAB 2014–01, which states: ‘‘Plan 

fiduciaries must be able to demonstrate compliance 

with ERISA’s fiduciary standards for all decisions 

made to locate missing participants and distribute 

benefits on their behalf. If audited, plan fiduciaries 

could demonstrate compliance using paper or 

electronic records.’’ 27 1989–2 CB 81. 

when benefits can be paid or begin to 

be paid, plans will have fewer amounts 

to calculate and report for missing 

participants with non-de minimis 

benefits. 

Information on missing participants 

forms filed for DB and DC plans with 

PBGC must be certified. A commenter 

suggested that PBGC add a checkbox to 

the forms requiring filers to assert that 

benefit transfer amounts are correct, to 

remind filers of their obligations. PBGC 

believes the general certification is 

sufficient and that adding another check 

box to the form is unlikely to increase 

compliance. 

One commenter recommended that 

some questions be added to the Form 

5500 Annual Return/Report of 

Employee Benefit Plan about whether 

and how DC plans used the missing 

participants program. PBGC will 

consider this comment as part of its 

review of the Form 5500. 

Filing for Abandoned DC Plans 

The final regulation, like the 

proposed, provides that the 

requirements to use the missing 

participants program, including filing 

requirements and forms and 

instructions, apply to all terminated DC 

plans that choose to use the program, 

including abandoned plans and QTAs 

winding up such plans. One commenter 

asked PBGC to clarify filing 

requirements for abandoned DC plans 

with respect to diligent searches. The 

commenter noted that a QTA may not 

have or have access to the kinds of 

records that typically yield participant 

contact information as part of a diligent 

search. 

The diligent search requirement for 

DC plans, including abandoned DC 

plans, is basically the same as the 

corresponding guidance for fiduciaries 

issued by the Department of Labor 

under section 404 of ERISA. PBGC 

expects that any documentation 

sufficient to demonstrate compliance 

with the fiduciary duty to search for 

missing participants would likewise 

satisfy any filing requirements PBGC 

might impose for diligent searches.26 As 

indicated under What to file above, 

PBGC has decided not to require 

submission of diligent search 

documentation with missing 

participants forms; but if it were to do 

so, such documentation would most 

naturally relate to the QTA’s search 

efforts rather than to the content of 

historical records. 

Missing or incomplete historical 

records can present a challenge to any 

plan, not just abandoned DC plans 

(although the latter as a group are 

particularly likely to suffer from this 

problem). PBGC expects the challenges 

of making, keeping, finding, and using 

records to be dealt with carefully, 

skillfully, prudently, and diligently, and 

where that is the case, PBGC believes 

this final rule provides flexibility to 

accommodate difficulties of the kind 

contemplated by the commenter. 

Filing Deadline 

In the proposed regulation, the filing 

deadline for title IV single-employer DB 

plans would have been 90 days after the 

distribution deadline in PBGC’s 

regulation on Termination of SingleEmployer Plans (29 CFR part 4041). (For 

plans undergoing sufficient distress 

terminations, the distribution deadline 

reflects such plans’ special 

circumstances.) For all other plans, 

including DC plans, the filing deadline 

would be 90 days after completion of all 

distributions not subject to the missing 

participants program. 

One commenter expressed concern 

that the proposed filing deadline for DC 

plans—90 days after the last distribution 

to a participant who isn’t missing— 

might not give DC plans enough time to 

complete diligent search and other 

termination tasks if the plan potentially 

has many missing participants. The 

commenter suggested the timeframe be 

extended to 180 days. There was also a 

question from a commenter as to 

whether payment from DC plans (of the 

benefit transfer amount and fees, if any) 

would be required when forms were 

filed. PBGC responds to this latter 

comment that it expects that forms and 

any required payment would be sent 

simultaneously. 

As to the former, PBGC has given new 

thought to its administrative procedures 

for processing filings and now believes 

that the mechanics of filing are better 

left to the missing participants forms 

and instructions, where there is a bit 

more flexibility than if the procedures 

were hard-wired in the regulatory text. 

With regard to filing deadlines for DC 

plans, while PBGC wants plans to act 

promptly, it does not want to set 

standards that discourage DC plan 

participation. PBGC’s understanding is 

that plans not covered by title IV of 

ERISA must distribute all assets to 

participants and beneficiaries as soon as 

administratively feasible after the plan’s 

termination date. As a rule of thumb, 

plans are expected to complete 

termination within one year. 

Accordingly, the filing instructions set 

the filing deadline for plans not covered 

by title IV as the later of 90 days after 

the last distribution not subject to the 

missing participants regulation or one 

year after the plan’s termination date 

under IRS Rev. Rul. 89–87.27

For single-employer plans covered by 

title IV, the filing deadline set in the 

filing instructions is the same as under 

the existing regulations, the date the 

post-distribution certification is due, 

i.e., within 30 days after the last 

distribution date. This deadline was 

changed back to the existing rule from 

what was in the proposed regulation to 

maintain consistency in filing for singleemployer DB plans undergoing standard 

terminations. 

PBGC Reliance 

The vast majority of plans using the 

expanded missing participants program 

will be DC plans, over which (beyond 

their participation in the program) 

PBGC has no authority. The same is true 

of small professional service DB plans. 

This circumstance has led PBGC to reevaluate its function under the missing 

participants program with respect to all 

plans covered by the program; that reevaluation is reflected in the revision of 

the administrative review regulation 

including noting that a participant’s 

recourse is against the plan or plan 

sponsor, and not PBGC, if a plan 

incorrectly calculated a benefit transfer 

amount (see Administrative Review 

under Related Regulatory Amendments 

below). PBGC has concluded that in its 

role as administrator of the missing 

participants program, it has and may 

exercise only very constrained 

authority. Accordingly, PBGC has 

removed from the final regulation 

provisions dealing with audits and 

related matters and replaced them with 

provisions making clear that as the 

missing participants program 

administrator, PBGC relies on 

information from plans participating in 

the program and accepts that 

information. PBGC holds the 

information and funds entrusted to it 

and passes them on to proper claimants. 

While this does not mean that mistakes 

cannot be corrected, it does mean that 

the missing participants program will 

not be expected to take the initiative in 

making corrections. However, PBGC’s 

role as administrator of the missing 

participants program does not detract 

from its authority as administrator of the 

title IV insurance program, including as 

to matters bearing on the missing 

participants program (such as the 

amount of benefit a missing distributee 


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28The final rule does not include on this list the 

two other categories of § 4022.93 which are: Estates, 

if open, and next of kin in accordance with 

applicable state law. 

29 In PBGC’s view, this terminology includes 

adoptive relationships (but not ‘‘step’’ 

relationships); thus the terminology is used without 

qualifying adjectives (such as ‘‘natural or adopted’’). 

may be entitled to from a plan 

terminated in a standard termination). 

The extent of that authority is not a 

proper subject of the missing 

participants regulation. Neither is the 

extent of the authority of other federal 

agencies to pursue violations of ERISA 

and the Code including with respect to 

plan terminations and the distribution 

of assets to participants missing or not. 

No provision of the missing participants 

regulation detracts from that authority. 

Benefits Paid to Located Participants 

Pay-Out Rules Common to DB and DC 

Plans 

One principle that carries over from 

the existing regulation to the final 

regulation is that PBGC will receive 

money for the benefits of some missing 

distributees but only information about 

the benefits of others. As under the 

current program, therefore, there will be 

two ways PBGC may connect claimants 

with their benefits. PBGC may pay 

benefits itself (where PBGC has received 

a benefit transfer amount from the 

claimant’s plan) or may provide 

information to the claimant from the 

plan about how benefits not transferred 

to PBGC can be claimed (for example, 

where they have been annuitized with 

an insurer or transferred to an IRA). The 

final regulation, like the proposed, 

modifies the language about PBGC’s 

providing information to clarify that 

PBGC’s role in such circumstances 

(which is subject to the Privacy Act) 

does not include resolution of questions 

about entitlement to a benefit held by 

another entity (such as an insurance 

company). Those questions, and 

questions about revealing personal 

information about such a missing 

participant to a different claimant, are 

more properly resolved by the entity (for 

example, insurer or custodian) holding 

the benefit. 

A concept common to both DB and 

DC plans in the final regulation, as in 

the proposed, is that of ‘‘qualified 

survivors,’’ who would be entitled to 

benefits with respect to a missing 

participant in situations involving—for 

example—deceased missing participants 

without spouses. 

The difference between the proposed 

and final rules is that for both DB and 

DC plans, PBGC in the final rule would 

look to beneficiary designations 

provided by the plan in its filing with 

PBGC as part of determining who would 

be entitled to benefits with respect a 

deceased missing participant. The 

proposed rule only included this 

provision for DC plans. While it may be 

uncommon that a DB plan would have 

a valid beneficiary designation on file 

before a benefit election is made, it is 

not unheard-of. To recognize these 

cases, PBGC included in the definition 

of ‘‘qualified survivor’’ for DB plans 

reference to beneficiary designations 

provided by the plan in its filing with 

PBGC. 

The final rule, therefore, provides that 

PBGC will identify qualified survivors 

for both DB and DC plan missing 

distributees by looking first to 

provisions of any applicable QDRO; 

then, PBGC will look to the plan’s filing 

with PBGC for identification of persons 

potentially entitled to benefits with 

respect to the decedent under plan 

provisions (including beneficiary 

designations consistent with plan 

provisions); finally, if the plan’s filing 

did not identify a person entitled to 

benefits with respect to a decedent, 

PBGC will refer to a list of relatives that 

echoes § 4022.93 of PBGC’s regulation 

on Benefits Payable in Terminated 

Single-Employer Plans, but includes just 

four categories: 28 Spouses, children, 

parents, and siblings.29

When PBGC finds a participant, 

depending on whether the amount is de 

minimis, the participant has a choice of 

distribution options and methods. 

Several commenters queried whether 

PBGC could distribute lump sum 

retirement savings to found participants 

in a direct rollover to a qualified plan 

or IRA. PBGC does offer participants the 

option of tax-free rollovers directly into 

a qualified retirement plan or IRA. 

PBGC also allows for partial rollovers, 

rollovers to Roth IRAs, and taxable 

direct deposit into a savings or checking 

account (and participants may choose to 

be paid out by check). In addition, 

PBGC believes the missing participants 

program complies with all applicable 

tax withholding and reporting rules 

with respect to retirement plan money 

held in the program and rolled over or 

otherwise distributed to found 

participants. 

The final regulation, like the 

proposed, does not provide pay-out 

rules for situations involving DB 

participants whose benefits went into 

pay status under the plan before they 

became missing. Nor does it provide 

pay-out rules for situations—under 

either DB or DC plans—involving 

missing beneficiaries (such as situations 

involving missing alternate payees or 

situations where a plan knows a 

participant is dead and has a 

beneficiary, but the beneficiary is 

missing). PBGC considers such 

circumstances sufficiently uncommon 

that the new regulation need not 

address them. PBGC had invited public 

comment about whether the regulation 

should address such circumstances and 

if so, how. One commenter 

acknowledged PBGC’s conclusion, but 

suggested that PBGC might find those 

circumstances more common under the 

new program. While PBGC did not make 

a change in the final regulation, it 

intends to review whether pay-out rules 

may be necessary in such circumstances 

as it gains experience with the new 

missing participants program. 

For both DB and DC plans, the final 

regulation does not deal (as the existing 

regulation does) with details such as 

election of annuity starting dates, which 

are left to policies and procedures 

reflected in PBGC’s missing participants 

forms and instructions. 

DC Plan Pay-Out Rules 

The DC plan pay-out rules in the final 

regulation, like the proposed, are 

relatively simple. The rules specify that 

PBGC will pay lump sums to found 

participants whose benefit transfer 

amounts are de minimis (defined under 

section 411(a)(11) of the Code and 

section 203(e) of ERISA as $5,000 or 

less). A found distributee whose benefit 

transfer amount is non-de minimis will 

be paid an annuity (a 50 percent joint 

and survivor annuity if married), unless 

the distributee elects (with spousal 

consent if married) a lump sum (or 

another type of annuity) instead. PBGC 

will make available the same annuity 

forms that it does for participants in 

trusteed plans under § 4022.8. 

One commenter pointed out that most 

DC plans don’t include annuity options 

and are designed to satisfy the statutory 

exception under the Code and ERISA 

(section 401(a)(11)(B)(iii) of the Code 

and section 205(b)(1)(C) of ERISA) from 

the qualified joint and survivor annuity 

rules. The commenter questioned why 

PBGC would propose a pay-out rule for 

participants with non-de minimis 

benefits contrary to the distribution 

options these DC plan participants 

might be expecting. Another commenter 

stated its support for having annuity 

options as the default pay-out for nonde minimis accounts. 

As stated above, found participants 

with de minimis benefit transfer 

amounts will receive their distribution 

in a lump sum, as will the survivors of 

a deceased participant with no living 

spouse. This makes sense where 

benefits are small or spouses don’t exist. 

PBGC believes found participants (and 


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30For example, a monthly benefit starting at age 

553⁄4 would be 75 percent of the age 56 amount plus 

25 percent of the age 55 amount. 

their spouses) with larger benefits 

should have a choice of distribution 

options, which include various annuity 

forms and lump sums. Participants are 

not prevented from choosing a lump 

sum, and PBGC makes valuable lifetime 

income options available to them 

regardless of whether the plan did so. 

PBGC has retained this choice for DC 

plan participants and adopted the 

proposed pay-out rules in the final 

regulation without change. 

Additionally, as in the proposed 

regulation, lump sum distributions will 

include interest at the Federal mid-term 

rate. Conversions to annuities will be 

made using assumptions under section 

205(g)(3) of ERISA and section 417(e)(3) 

of the Code. For elections before the 

participant’s age 55, PBGC will provide 

information on all available payment 

options for the individual’s 

consideration, including annuity 

benefits, which are only available at 55 

or later. 

DB Plan Pay-Out Rules 

As discussed above (under DB 

Plans—Final; Reported Amounts), 

PBGC in the final regulation recognizes 

that some DB plans require that benefits 

begin no later than the normal 

retirement date. Thus, wherever the 

proposed regulation specified the 

required beginning date, the final 

regulation specifies the normal 

retirement date (or accrual cessation 

date if later), to maintain a simplified 

approach consistent with the rules for 

valuing benefit transfer amounts. 

The pay-out rules that PBGC proposed 

for DB plan participants were generally 

standardized, rather than reflecting each 

participant’s plan provisions. To collect, 

retain (perhaps for decades), interpret, 

and apply plan provisions for hundreds 

of plans, some of which might apply to 

only one missing distributee, seemed 

(and still seems) a daunting 

administrative challenge—a challenge 

out of proportion to the ideal of paying 

the benefits of found distributees as 

their plans would have paid them. 

Instead, PBGC focused on two pay-out 

features that loomed largest as having 

the most value to participants— 

eligibility for lump sums and early 

retirement subsidies—and proposed to 

preserve those, while in other respects 

treating all distributees according to 

common rules. 

Two commenters recommended that 

PBGC preserve more of the features of 

each participant’s plan—such as the 

early retirement date—or even that 

PBGC follow all pay-out provisions of 

each distributee’s plan. PBGC 

understands the allure of reproducing 

the features of every distributee’s plan, 

but believes it has drawn the line at a 

reasonable place. Accordingly, the payout rules are personalized in the final 

regulation only as much as in the 

proposed. 

Flowing from the principle of 

preserving certain material rights under 

plans, PBGC will no longer compute 

annuity benefits for a participant as the 

actuarial equivalent of the benefit 

transfer amount (as under the existing 

regulation). Rather, PBGC will provide 

annuity benefits based on what the plan 

would have provided, including any 

early retirement subsidies to which 

participants would have been entitled 

had they not been missing. This is 

possible because plans must report the 

straight life annuity payable to the 

participant commencing at each integral 

age from age 55 to normal retirement 

date (or accrual cessation date if later). 

Another commenter recommended 

that lump-sum pay-outs by PBGC for 

non-de minimis benefits be based on the 

value of distributees’ benefits 

determined using plan assumptions. 

The benefit transfer amount is the larger 

of the amount determined using plan 

assumptions or the amount determined 

using PBGC missing participant 

assumptions. Thus, accepting this 

recommendation would appear to 

require additional reporting by plans 

and record-keeping by PBGC and to 

result in somewhat lower benefits for 

some distributees. PBGC has concluded 

on balance that the recommendation 

would introduce unnecessary 

administrative complexity without 

providing a clearly commensurate 

advantage. Accordingly, PBGC has not 

adopted this suggestion. 

In the proposed rule, PBGC provided 

pay-out rules for deceased missing 

participants in DB plans that were the 

same whether the benefit was de 

minimis or non-de minimis. PBGC has 

rethought this approach in light of the 

fact that its benefit payment policy for 

trusteed plans treats the two categories 

of benefits differently. Lump sums are 

routinely paid to participants with de 

minimis benefits and become available 

for distribution to participants’ heirs. In 

contrast, non-de minimis benefits are 

routinely paid as annuities. PBGC 

anticipates less opportunity for 

confusion in processing payments to 

located participants if its approach to 

deceased missing participants with de 

minimis benefits follows more closely 

its approach to deceased participants 

with de minimis benefits in trusteed 

plans. Accordingly, PBGC has revised 

the proposed DB pay-out rules for 

deceased participants to make those 

rules applicable to non-de minimis 

benefits only, and has added a new 

provision for payment of a deceased 

missing participant’s de minimis benefit 

to the participant’s qualified survivors 

as a lump sum. 

The main elements of the DB pay-out 

rules are: 

• Mandatory lump sums paid if the 

amount transferred to PBGC is $5,000 or 

less. 

• Elective lump sums available if 

available under the plan and the amount 

transferred to PBGC is over $5,000 

(subject to spousal consent if married). 

• A variety of annuity payment forms 

available if the amount transferred to 

PBGC is over $5,000. 

• Annuities available as early as age 

55 if the amount transferred to PBGC is 

over $5,000. 

• Amount of a straight life annuity 

starting at an integral age equal to the 

amount the plan would have paid at 

that age (as reported by the plan) (with 

linear interpolation between integral 

ages 30); amounts of other annuity forms 

determined using PBGC conversion 

methodology. 

• Annuity payments starting after 

normal retirement date calculated as if 

the annuity began at normal retirement 

date (or accrual cessation date if later), 

with missed payments paid as a lump 

sum with interest. 

• Pre-retirement death benefits 

available if a married missing 

participant dies before the normal 

retirement date; but not if the 

participant is unmarried. 

• Post-retirement death benefits 

available if a missing participant dies 

after normal retirement date whether 

married or not. 

If the annuity PBGC would pay a 

participant is not a straight life annuity, 

the payments would be set to make the 

benefit actuarially equivalent to the 

straight life annuity that would have 

been payable starting at the same time. 

PBGC will use the actuarial assumptions 

under its regulation dealing with 

optional forms of benefit in trusteed 

plans (29 CFR 4022.8(c)(7)) to make the 

conversion. If, on the other hand, PBGC 

pays a lump sum, it would be equal to 

the amount transferred to PBGC plus 

interest at the Federal mid-term rate. 

Lump sums—where available—are 

payable at any age (while annuities are 

not paid before a participant’s age 55). 

Spousal consent is required if a 

participant wants to receive a non-de 

minimis benefit in any form other than 

a joint and 50-percent survivor annuity. 

In situations requiring spousal consent 

to payment of a lump sum before age 55, 


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PBGC will provide the participant with 

information about the availability of 

payment options. 

If an annuity begins later than the 

participant’s normal retirement date (or 

accrual cessation date if later), missed 

payments with interest (make-up 

amount) will be paid in a lump sum. If 

the participant dies before normal 

retirement age, the survivor annuity will 

be deemed to begin on the later of the 

participant’s 55th birthday or date of 

death. If the participant dies on or after 

the normal retirement date, the survivor 

annuity will be deemed to begin at the 

normal retirement date (or accrual 

cessation date if later). For missing 

participants under contributory plans, 

PBGC will pay benefits (including preretirement death benefits) at least equal 

to the accumulated mandatory 

employee contributions. 

PBGC Discretion 

It is impossible to anticipate and 

appropriately provide for every state of 

events in an undertaking like the 

missing participants program. To 

preserve as much flexibility as possible 

while treating like cases in like manner, 

the final regulation, like the proposed, 

incorporates in each subpart a section 

authorizing PBCG to grant waivers, 

extend deadlines, and in general adapt 

to unforeseen circumstances, with the 

proviso that similar treatment be given 

to similar situations. This provision 

takes the place of § 4050.12(g). No 

comments were received on the 

proposed provision and it is adopted 

without change in the final regulation. 

Repeal of Unnecessary Provisions 

Most of the special provisions in 

§§ 4050.11 and 4050.12 of the existing 

regulation are repealed as unnecessary 

or inappropriate: 

• References to the maximum benefit 

under Code section 415 (if any) 

(§ 4050.5(a) of the existing regulation) 

and the minimum benefit under a 

contributory plan (§ 4050.12(c)(1)). 

Those limitations apply to the 

provisions and administration of plans 

generally and are not specific to the 

missing participants program. 

• The exclusive benefit provision in 

§ 4050.11(a) and the limitation on 

benefits to the amount transferred to 

PBGC by a plan for a missing participant 

(§ 4050.11(a) and (b)). The first of these 

seems unnecessary and the second 

would no longer be true. 

• Relationship of benefits paid to the 

guaranteed benefit (§ 4050.11(c)), 

benefits payable in a sufficient distress 

termination (§ 4050.12(e)), and benefits 

payable on audit or other events 

(§ 4050.12(f)). 

• Limitations on the annuity starting 

date (§ 4050.11(d)). PBGC plans to deal 

with such matters in its policies for 

administering the expanded missing 

participants program. 

• Disposition of voluntary 

contributions (§ 4050.12(c)(2)) and 

residual assets (§ 4050.12(d)). PBGC 

specifically solicited comment on repeal 

of the treatment of residual assets (assets 

not needed to satisfy plan benefits), but 

received none. 

• Provisions regarding missing 

participants located quickly by PBGC 

(§ 4050.12(a)). This provision has not 

been used, and PBGC believes that 

enforcement measures where a plan 

misrepresents its compliance with 

diligent search requirements will be 

more effective than this provision. 

• QDROs (§ 4050.12(b)). PBGC 

provides in the pay-out rules that 

allowance be made for QDROs. 

• Payments beginning after the 

required beginning date (§ 4050.12(h)). 

This subject is dealt with in the benefit 

pay-out provisions. 

Related Regulatory Amendments 

In General 

PBGC is making conforming 

amendments to its regulations on Filing, 

Issuance, Computation of Time, and 

Record Retention (29 CFR part 4000), 

Terminology (29 CFR part 4001), 

Termination of Single-Employer Plans 

(29 CFR part 4041), and Termination of 

Multiemployer Plans (29 CFR part 

4041A). 

Administrative Review 

PBGC’s regulation on Rules for 

Administrative Review of Agency 

Decisions (29 CFR part 4003) sets forth 

the determinations, listed in § 4003.1(b), 

for which aggrieved persons are 

required to seek administrative review, 

(i.e., in the form of administrative 

appeals or reconsiderations) before they 

may seek judicial review. Section 

4003.1(b)(11) applies to the missing 

participants program. Subparagraph (i) 

of § 4003.1(b)(11) relates to a 

determination about the benefits 

payable by PBGC based on the amount 

paid to PBGC under the program 

(assuming the amount paid to PBGC was 

correct). Subparagraph (ii) of 

§ 4003.1(b)(11) relates to a 

determination as to the correctness of an 

amount paid to PBGC under the 

program (to the extent that the benefit 

to be paid does not exceed the 

guaranteed benefit). 

PBGC proposed changes to the 

administrative review regulation and 

received no comment on the proposed 

changes. The changes, which are 

adopted in the final regulation, are as 

follows. PBGC is changing 

§ 4003.1(b)(11) by revising the content 

of paragraph (b)(11)(i) and eliminating 

paragraph (b)(11)(ii). Therefore section 

4003.1(b)(11) will no longer have two 

subparagraphs. Section 4003.1(b)(11) 

does not refer to benefits based on an 

amount paid to PBGC, because in some 

cases benefits paid by PBGC under the 

new program will be monthly annuities 

based on information, such as 

calculations, reported by the plan, not 

on amounts paid to PBGC. Thus, an 

appeal right based on a determination 

pursuant to revised § 4003.1(b)(11) 

relates simply to a determination of the 

benefit payable under section 4050 of 

ERISA and the missing participants 

regulation. 

An appeal based on a determination 

made under existing regulation 

§ 4003.1(b)(11)(ii)—that the right 

amount was paid to PBGC—is no longer 

permitted. PBGC does not make 

determinations about the amounts to be 

transferred to PBGC by plans under the 

missing participants program; rather, it 

is plans themselves that determine how 

much to transfer. Thus, there is no 

PBGC action for a person to be aggrieved 

by or for PBGC to revoke or change. 

Recourse must be against the plan or, if 

the plan no longer exists, the plan 

sponsor. If a claimant’s benefit is 

guaranteed by PBGC, and the claimant 

is unable to collect from the plan or 

sponsor, the claimant may have a right 

to payment of the guaranteed benefit by 

PBGC, and a dispute about PBGC’s 

determination of the amount of that 

benefit is subject to the requirement to 

pursue administrative review under 

§ 4003.1(b)(8). 

Cost-Benefit Analysis 

In General 

This rulemaking is not subject to the 

requirements of Executive Order 13771 

because it results in no more than de 

minimis net costs. The rule has been 

determined to be ‘‘significant’’ under 

Executive Order 12866. The Office of 

Management and Budget has reviewed 

this final rule under E.O. 12866. 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, and public health and 

safety effects, distributive impacts, and 

equity). E.O. 13563 emphasizes 

retrospective review of regulations, 

harmonizing rules, and promoting 

flexibility. E.O. 13771 directs agencies 


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31Benefits paid out each year are not limited to 

those of missing participants taken into the program 

that year. It may take years to find a missing 

participant. But the number of participants entering 

the program is an indication of the program’s size. 

to offset new incremental costs imposed 

by new regulations by the elimination of 

existing costs associated with two prior 

regulations; where there are no new 

incremental costs, as here, this 

requirement does not apply. 

Executive Orders 12866 and 13563 

require that a comprehensive regulatory 

impact analysis be performed for any 

economically significant regulatory 

action, defined as an action that would 

result in an annual effect of $100 

million or more on the national 

economy or which would have other 

substantial impacts. It has been 

determined that this final rule is not 

economically significant. Thus a 

comprehensive regulatory impact 

analysis is not required. PBGC has 

nonetheless examined the economic and 

policy implications of this rule and has 

concluded that the net effect of the 

action is to reduce costs in relation to 

benefits. 

This final rule repeals part 4050 of 

PBGC’s regulations and substitutes an 

expanded but simpler and more costeffective part. 

This final rule is the cornerstone of a 

freshly designed program that expects to 

improve the process of reconnecting 

American workers with lost retirement 

benefits, at a relatively tiny cost. Here’s 

how the program will work. 

• PBGC will accept the retirement 

benefits and record information of 

missing participants from terminating 

retirement plans. 

• PBGC will maintain a pension 

search directory where missing 

participants can find their lost 

retirement benefits. 

• PBGC will actively search for 

missing participants. 

• The benefits held by PBGC will 

earn interest and be protected against 

investment losses. 

• When missing participants are 

found, PBGC will pay their benefits in 

annuity or lump sum form. 

This program will save retirement 

plans time and money in dealing with 

the benefits of missing participants. 

More participants will receive their 

retirement benefits because the 

centralized pension search directory 

will make finding lost benefits much 

easier and PBGC will search for missing 

participants. 

PBGC has been successfully operating 

a small-scale version of this program for 

years, limited to single-employer DB 

plans covered by title IV of ERISA. 

Allowing the far greater number of DC 

plans into the program will permit 

economies of scale. PBGC estimates that 

the transfer impacts of this final rule 

will be close to $19 million, as shown 

in the table below. 

Annual transfer amounts Before final rule After final rule Net transfer 

Benefits recovered ..................................................................... $7 million ........................ $26 million ...................... $19 million. 

Annual cost amounts Before final rule After final rule Net cost 

Filling out forms .......................................................................... $456,590 ........................ $645,750 ........................ $189,160. 

Valuing benefits (DB) ................................................................. No change.

Searching (DB) ........................................................................... $19,100 .......................... $32,500 .......................... $13,400. 

Total .................................................................................... $0.5 million ..................... $0.7 million ..................... $0.2 million. 

The ‘‘before’’ column of the table 

shows benefits and costs if the final rule 

did not become effective. The ‘‘after’’ 

column shows benefits and costs if the 

final rule becomes effective. The ‘‘net’’ 

column shows the effect of the final rule 

(the ‘‘after’’ column minus the ‘‘before’’ 

column). (The costs for DC plans are not 

imposed by the final rule, but arise from 

plans’ voluntary election to participate 

in the program.) 

Benefits Recovered 

The missing participants program 

provides the promise of a ‘‘one-stop 

shop’’ for workers to find lost benefits 

from terminated retirement plans, 

augmented by active searches by PBGC 

to find those to whom benefits are 

owed. By expanding the number of 

those who benefit from the current 

program, both absolutely and in relation 

to associated costs, this final rule cuts 

costs in relation to benefits. 

For fiscal years 2013–2015, PBGC 

restored about $2.27 million in lost 

benefits annually to those entitled to 

them, while taking in about 955 missing 

participants per year from about 200 DB 

plans. Extrapolating from data gleaned 

from the existing single-employer DB 

program and Form 5500 filings, PBGC is 

projecting that its intake under this final 

rule will expand by 10,000 missing 

participants per year from 3,100 DC 

plans. In the proposed rule, PBGC 

calculated the anticipated benefit 

recovery based on the increase in the 

number of plans (about a 16-fold 

increase). PBGC believes a better and 

more conservative approach is to 

calculate its anticipated payment of 

benefits based on the projected increase 

in the number of missing participants 

(about an 11-fold increase). 

Accordingly, PBGC is projecting that it 

will unite missing participants with an 

estimated $26 million worth of lost 

retirement benefits each year under this 

final rule ($2.27 million × 10,955/955).31

As noted above, PBGC’s current 

benefit pay-out is about $2.27 million. 

But this is for DB plans only. Although 

DC plans have not been able to 

participate in the centralized missing 

participants program, PBGC assumes 

that some lost DC benefits are recovered. 

PBGC also assumes that the difference 

between the ease of finding benefits in 

a single centralized governmental data 

base versus many fragmented privatesector ones means that the benefit 

recovery ratio is far more favorable for 

the former. Accordingly, PBGC assumes 

that, among the DC plans that will 

choose to participate in the expanded 

missing participants program, the 

amount of benefits that would be 

recovered without the program is about 

20 percent of the amount recoverable 

with the program, or about $4.75 

million. Thus the total benefits that 

PBGC assumes would be reunited with 

those entitled to them in the absence of 

this final rule is about $7 million. The 

effect of the final rule will be to increase 

benefits by $19 million. 

Filling Out Forms 

As discussed in the proposal, the 

burden of using PBGC’s existing forms 

(or comparable forms) for the expanded 

program would be about $861,000 (for 

3,300 plans per year), assuming two 

hours per plan. In the absence of this 

final rule, the portion of this cost 

attributable to 200 DB plans (about 

$52,180) would still be incurred. In 

addition, the 3,100 DC plans that PBGC 

expects to participate in the expanded 


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32M–17–21, Guidance Implementing Executive 

Order 13771, Titled ‘‘Reducing Regulation and 

Controlling Regulatory Costs.,’’ Q&A 13, April 5, 

2017. 

program would, in the absence of this 

final rule, have to provide comparable 

information about their missing 

participants to whatever financial 

institutions were to hold the 

participants’ benefits. PBGC thinks it 

likely that such institutions would 

require plans to spend at least an hour 

filling out forms or otherwise providing 

information about missing participants. 

Using the same assumptions for pricing 

paperwork burden, this represents a cost 

of about $404,410. Thus in the absence 

of this rule, the cost incurred for filling 

out forms would be about $456,590. 

PBGC has redesigned its missing 

participants forms for use in the new 

program. The new forms contain only 

about 75 percent as many blanks to fill 

in as the current forms. Accordingly, 

PBGC is revising the assumed cost of 

filing under the final rule to 75 percent 

of the $861,000 previously assumed, or 

$645,750. For DB plans, this represents 

a decrease in costs. For DC plans, the 

costs will only be incurred by plans that 

decide to use the missing participants 

program. If, as PBGC assumes, 3,100 DC 

plans make that decision, the impact of 

the final rule is to increase costs by 

$189,160. 

Valuing Benefits 

Since DC plans simply send missing 

participants’ account balances to PBGC, 

they incur no cost for benefit valuation. 

And although the final rule changes the 

valuation rules for DB plans, the 

changes tend to offset each other. As 

indicated in the proposed rule, 

therefore, PBGC believes that the final 

rule makes no significant change in 

costs or benefits associated with valuing 

benefits. 

Searching 

Since the final rule imposes no search 

requirement on DC plans beyond what 

is already required under title I of 

ERISA, DC search costs are the same 

with or without the final rule and thus 

can be ignored in considering the 

changes in benefits and costs 

attributable to adoption of the final rule. 

In the proposed rule, PBGC discussed 

DB search costs on a plan-by-plan basis, 

consistent with the proposal that the 

same search rules (records searches plus 

a commercial locator service search) 

apply to all missing participants. The 

final rule generally requires a 

commercial locator service search, but 

permits plans to use a simple records 

search method for participants with 

normal retirement benefits of not more 

than $50 a month. Accordingly, the 

analysis must now be participant-byparticipant. 

PBGC believes its estimate that a 

search using a commercial locator 

service as defined in the final rule costs 

about $40 per participant is 

conservative. PBGC further believes that 

under the existing program (without a 

definition of ‘‘commercial locator 

service’’), many plans are incurring such 

costs, although many are not, and thus 

that it is reasonable to estimate that on 

average, search costs under the existing 

regulation are $20 per participant. On 

that basis, search costs under the 

existing program may be estimated at 

$19,100 ($20 each for 955 missing 

participants). 

PBGC does not currently collect data 

on missing participants’ normal 

retirement benefits because it simply 

pays annuities that are actuarially 

equivalent to the amounts plans deposit 

with PBGC. But the actuarial value of a 

$50 normal retirement benefit can be 

calculated for any age, and PBGC has 

statistics on the distribution of ages and 

benefit sizes among missing 

participants. Using this information, 

PBGC estimates that 80 percent of 

missing participants have normal 

retirement benefits of not more than 

$50. Out of 955 missing participants, 

therefore, PBGC expects 764 to be 

searched for by the commercial locator 

service method at a cost of $40 each 

(total $30,560). 

Plans could choose to use commercial 

locator services for the 191 other 

missing participants, but since this 

group includes some very small 

benefits, PBGC assumes that simple 

records searches will be done for them. 

For smaller benefits, the ‘‘affordability’’ 

limitation in the final rule will keep 

costs low. For larger benefits, the cost of 

records searches will vary with the 

availability and format of records, but 

PBGC expects many record systems to 

be electronic, permitting nearly 

instantaneous searching. For purposes 

of this analysis, PBGC is putting a figure 

of $10 on the records search process. 

That makes the search cost for this 

group $1,910, and the total cost of 

searching under the final rule $32,470. 

Fees 

While actions establishing or 

changing fees for governmental services 

are not considered costs requiring 

offsets, as explained in OMB guidance 

on the requirements of E.O. 13771,32

fees are taken into account for purposes 

of analyzing the transfers, costs and 

benefits of a rulemaking under E.O. 

12866. Therefore, the missing 

participant program administrative fee 

is described here. 

As noted above, PBGC’s working 

hypothesis is that opening the missing 

participants program to DC plans will 

add 10,000 missing participants per year 

to the current figure of 955. The fee is 

only paid on benefits transferred that 

are greater than $250. Statistics on the 

current DB-only program indicate that 

about 86 percent of missing participants 

have benefits worth over $250. 

Extrapolating to the new combined 

program, PBGC expects $35 fees to be 

paid for about 9,420 missing 

participants, a total of about $330,000. 

Under the current DB-only program, 

fees are paid in the form of a ‘‘load’’ of 

$300 built into the actuarial 

assumptions for valuing benefits over 

$5,000. About 210 (22 percent) of the 

955 missing participants currently 

entering the program annually have 

benefits at least that high; thus annual 

fees are currently running at about 

$63,000. But fees are a factor in the 

placement of retirement benefits outside 

PBGC’s program as well. One 

commenter described the exhaustion of 

a $100 account within months due to a 

combination of set-up and maintenance 

fees. Fees for account statements and for 

processing withdrawals are also 

common. Because it may be years before 

a missing participant finds and claims a 

benefit, maintenance or management 

fees can cumulate to very substantial 

levels. For the 10,000 missing 

participants that PBGC assumes DC 

plans would choose to bring into the 

PBGC missing participants program, the 

burden of fees in the absence of the 

program—in the absence of the final 

rule—can conservatively be considered 

equivalent to a single up-front charge of 

$100. For an assumed 10,000 missing 

participants, that amounts to $1 million 

a year. Thus, in the absence of this final 

rule, fees would be running about $1.06 

million a year. 

Accordingly, the effect of the final 

rule will be to reduce fees by about 

$730,000. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act 

imposes certain requirements with 

respect to rules that are subject to the 

notice and comment requirements of 

section 553(b) of the Administrative 

Procedure Act and that are likely to 

have a significant economic impact on 

a substantial number of small entities. 

Unless an agency determines that a final 

rule is not likely to have a significant 

economic impact on a substantial 

number of small entities, section 604 of 

the Regulatory Flexibility Act requires 


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33See, e.g., ERISA section 104(a)(2), which 

permits the Secretary of Labor to prescribe 

simplified annual reports for pension plans that 

cover fewer than 100 participants. 

34See, e.g., Code section 430(g)(2)(B), which 

permits single-employer plans with 100 or fewer 

participants to use valuation dates other than the 

first day of the plan year. 

35See, e.g., DOL’s final rule on Prohibited 

Transaction Exemption Procedures, 76 FR 66,637, 

66,644 (Oct. 27, 2011). 

that the agency present a final 

regulatory flexibility analysis at the time 

of the publication of the final rule 

describing the impact of the rule on 

small entities and steps taken to 

minimize the impact. Small entities 

include small businesses, organizations 

and governmental jurisdictions. 

Small Entities 

For purposes of the Regulatory 

Flexibility Act requirements with 

respect to this final rule, PBGC 

considers a small entity to be a plan 

with fewer than 100 participants. This 

is consistent with certain requirements 

in title I of ERISA 33 and the Internal 

Revenue Code,34 as well as the 

definition of a small entity that the 

Department of Labor (DOL) has used for 

purposes of the Regulatory Flexibility 

Act.35

Further, while some large employers 

may have small plans, in general most 

small plans are maintained by small 

employers. Thus, PBGC believes that 

assessing the impact of the final rule on 

small plans is an appropriate substitute 

for evaluating the effect on small 

entities. The definition of small entity 

considered appropriate for this purpose 

differs, however, from a definition of 

small business based on size standards 

promulgated by the Small Business 

Administration (13 CFR 121.201) 

pursuant to the Small Business Act. 

PBGC therefore requested comments on 

the appropriateness of the size standard 

used in evaluating the impact of the 

proposed rule on small entities. PBGC 

received no comments on this point. 

Certification 

PBGC certifies under section 605(b) of 

the Regulatory Flexibility Act (5 U.S.C. 

601 et seq.) that the amendments in this 

rule will not have a significant 

economic impact on a substantial 

number of small entities. Accordingly, 

as provided in section 605 of the 

Regulatory Flexibility Act (5 U.S.C. 601 

et seq.), sections 603 and 604 do not 

apply. This certification is based on 

PBGC’s estimate (discussed above) that 

the economic impact of the final rule on 

any entity would be insignificant. PBGC 

believes that the expanded missing 

participants program will be 

particularly helpful to small DC plans 

and that the improvements to the 

existing program will be helpful to 

small DB plans. 

Paperwork Reduction Act 

PBGC is submitting the information 

collection requirements under part 4050 

to the Office of Management and Budget 

(OMB) for review and approval under 

the Paperwork Reduction Act. The 

collection of information under part 

4050 is currently approved under OMB 

control number 1212–0036 (expires 

November 30, 2017). That control 

number also covers PBGC’s information 

collection on plan termination. PBGC is 

seeking paperwork approval of the new 

missing participants forms and 

instructions under a new control 

number. An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid OMB 

control number. 

PBGC needs the information 

submitted by plans under part 4050 to 

identify the entities that are to provide 

benefits with respect to missing 

distributees whose benefits are not 

transferred to PBGC; and to attempt to 

find missing distributees whose benefits 

are transferred to PBGC and to pay their 

benefits. 

PBGC estimates that the time for a 

plan to comply with the collection of 

information for the current program is 2 

hours. But PBGC has significantly 

simplified its forms, reducing the 

number of items by a quarter. PBGC 

thus estimates that the burden of 

compliance will be 75 percent of the 

burden estimated in the proposed rule. 

As discussed in this final rulemaking, 

there would be about 3,300 respondents 

each year, and the total hours spent on 

the information collection would be 

4,950. PBGC estimates that 20 percent of 

the work will be done in-house and 80 

percent contracted out. Thus the hour 

burden for plans is estimated at about 

990 hours (20 percent of 4,950 hours). 

The dollar burden of the 3,960 hours 

contracted out (80 percent of 4,950 

hours) is estimated at about $621,750. 

The dollar equivalent of the 990 inhouse hours is about $24,000. Total 

paperwork burden is estimated at 

$646,000. 

List of Subjects 

29 CFR Part 4000 

Employee benefit plans, Pension 

insurance, Pensions, Reporting and 

recordkeeping requirements. 

29 CFR Part 4001 

Employee benefit plans, Pension 

insurance, Pensions. 

29 CFR Part 4003 

Administrative practice and 

procedure, Employee benefit plans, 

Pension insurance, Pensions. 

29 CFR Part 4041 

Employee benefit plans, Pension 

insurance, Pensions. 

29 CFR Part 4041A 

Employee benefit plans, Pension 

insurance, Pensions. 

29 CFR Part 4050 

Employee benefit plans, Pension 

insurance, Pensions, Reporting and 

recordkeeping requirements. 

In consideration of the foregoing, 

PBGC amends 29 CFR parts 4000, 4001, 

4003, 4041, 4041A, and 4050 as follows: 

PART 4000—FILING, ISSUANCE, 

COMPUTATION OF TIME, AND 

RECORD RETENTION 

■ 1. The authority citation for part 4000 

continues to read as follows: 

Authority: 29 U.S.C. 1083(k), 1302(b)(3). 

§ 4000.41 [Amended] 

■ 2. In § 4000.41, remove ‘‘(premium 

payments), § 4050.6(d)(3) of this chapter 

(payment of designated benefits for 

missing participants)’’ and add in its 

place ‘‘(premium payments)’’. 

PART 4001—TERMINOLOGY 

■ 3. The authority citation for part 4001 

continues to read as follows: 

Authority: 29 U.S.C. 1301, 1302(b)(3). 

■ 4. In § 4001.1: 

■ a. The existing text is designated as 

paragraph (a) with the paragraph 

heading ‘‘In general.’’ added. 

■ b. Paragraph (b) is added to read as 

follows: 

§ 4001.1 Purpose and scope. 

* * * * * 

(b) Title IV coverage. Coverage by 

section 4050 of ERISA is not and does 

not result in or confer coverage by title 

IV of ERISA. 

§ 4001.2 [Amended] 

■ 5. In § 4001.2, the definition of 

‘‘Distribution date’’ is amended as 

follows: 

■ a. Paragraph (2) and paragraph (1) 

introductory text are removed. 

■ b. Paragraphs (1)(i) and (ii) are 

redesignated as paragraphs (1) and (2), 

respectively. 


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PART 4003—RULES FOR 

ADMINISTRATIVE REVIEW OF 

AGENCY DECISIONS 

■ 6. The authority citation for part 4003 

continues to read as follows: 

Authority: 29 U.S.C. 1302(b)(3). 

■ 7. In § 4003.1, paragraph (b)(11) is 

revised to read as follows: 

§ 4003.1 Purpose and scope. 

* * * * * 

(b) * * * 

(11) Determinations with respect to 

benefits payable by PBGC under section 

4050 of ERISA and part 4050 of this 

chapter. 

* * * * * 

PART 4041—TERMINATION OF 

SINGLE-EMPLOYER PLANS 

■ 8. The authority citation for part 4041 

continues to read as follows: 

Authority: 29 U.S.C. 1302(b)(3), 1341, 

1344, 1350. 

■ 9. In § 4041.28: 

■ a. Paragraph (a)(3) is added; 

■ b. Paragraph (c)(5) is amended by 

removing ‘‘part 4050’’ and adding in its 

place ‘‘subpart A of part 4050 of this 

chapter’’. 

The addition reads as follows: 

§ 4041.28 Closeout of plan. 

(a) * * * 

(3) Missing participants and 

beneficiaries. The distribution deadline 

is considered met with respect to a 

missing distributee to whom subpart A 

of part 4050 of this chapter applies if the 

benefit transfer amount for the missing 

distributee is considered timely 

transferred to PBGC under subpart A of 

part 4050 of this chapter. 

* * * * * 

PART 4041A—TERMINATION OF 

MULTIEMPLOYER PLANS 

■ 10. The authority citation for part 

4041A continues to read as follows: 

Authority: 29 U.S.C. 1302(b)(3), 1341a, 

1441. 

■ 11. In § 4041A.42: 

■ a. The existing text of § 4041A.42 is 

designated as paragraph (a) with the 

paragraph heading ‘‘In general.’’ added. 

■ b. Paragraph (b) is added to read as 

follows: 

§ 4041A.42 Method of distribution. 

* * * * * 

(b) Missing participants and 

beneficiaries. The plan sponsor must 

distribute plan benefits of missing 

distributees in accordance with subpart 

D of part 4050 of this chapter. 

■ 12. Part 4050 is revised to read as 

follows: 

PART 4050—MISSING PARTICIPANTS 

Subpart A—Single-Employer Plans Covered 

by Title IV 

Sec. 

4050.101 Purpose and scope. 

4050.102 Definitions. 

4050.103 Duties of plan administrator. 

4050.104 Diligent search. 

4050.105 Filing with PBGC. 

4050.106 Missing participant benefits. 

4050.107 PBGC discretion. 

Subpart B—Defined Contribution Plans 

4050.201 Purpose and scope. 

4050.202 Definitions. 

4050.203 Options and duties of plan. 

4050.204 Diligent search. 

4050.205 Filing with PBGC. 

4050.206 Missing participant benefits. 

4050.207 PBGC discretion. 

Subpart C—Certain Defined Benefit Plans 

Not Covered by Title IV 

4050.301 Purpose and scope. 

4050.302 Definitions. 

4050.303 Options and duties of plan 

administrator. 

4050.304 Diligent search. 

4050.305 Filing with PBGC. 

4050.306 Missing participant benefits. 

4050.307 PBGC discretion. 

Subpart D—Multiemployer Plans Covered 

by Title IV 

4050.401 Purpose and scope. 

4050.402 Definitions. 

4050.403 Duties of plan sponsor. 

4050.404 Diligent search. 

4050.405 Filing with PBGC. 

4050.406 Missing participant benefits. 

4050.407 PBGC discretion. 

Authority: 29 U.S.C. 1302(b)(3), 1350. 

Subpart A—Single-Employer Plans 

Covered by Title IV 

§ 4050.101 Purpose and scope. 

(a) In general. This subpart describes 

PBGC’s missing participants program for 

single-employer defined benefit 

retirement plans covered by title IV of 

ERISA. The missing participants 

program is a program to hold retirement 

benefits for missing participants and 

beneficiaries in terminated retirement 

plans and to help them find and receive 

the benefits being held for them. For a 

plan to which this subpart applies, this 

subpart describes what the plan must do 

upon plan termination if it has missing 

participants or beneficiaries who are 

entitled to distributions. This subpart 

applies to a plan only if it is a singleemployer defined benefit plan that— 

(1) Is described in section 4021(a) of 

ERISA and not in any paragraph of 

section 4021(b) of ERISA and 

(2) Terminates in a standard 

termination or in a distress termination 

described in section 4041(c)(3)(B)(i) or 

(ii) of ERISA (‘‘sufficient distress 

termination’’). 

(b) Plans that terminate but do not 

close out. This subpart does not apply 

to a plan that terminates but does not 

close out, such as a plan that terminates 

in a distress termination described in 

section 4041(c)(3)(B)(iii) of ERISA 

(‘‘insufficient distress termination’’). 

(c) Individual account plans. This 

subpart does not apply to an individual 

account plan under section 3(34) of 

ERISA, even if it is described in the 

same plan document as a plan to which 

this subpart applies. This subpart also 

does not apply to a plan to the extent 

that it is treated as an individual 

account plan under section 3(35)(B) of 

ERISA. For example, this subpart does 

not apply to employee contributions (or 

interest or earnings thereon) held as an 

individual account. (Subpart B deals 

with individual account plans.) 

§ 4050.102 Definitions. 

The following terms are defined in 

§ 4001.2 of this chapter: Annuity, Code, 

ERISA, insurer, irrevocable 

commitment, PBGC, person, and plan 

administrator. In addition, for purposes 

of this subpart: 

Accrual cessation date for a 

participant under a subpart A plan 

means the date the participant stopped 

accruing benefits under the terms of the 

plan. 

Accumulated single sum means, with 

respect to a missing distributee, the 

distributee’s benefit transfer amount 

accumulated at the missing participants 

interest rate from the benefit 

determination date to the date when 

PBGC makes or commences payment to 

or with respect to the distributee. 

Benefit determination date with 

respect to a subpart A plan means the 

single date selected by the plan 

administrator for valuing benefits under 

§ 4050.103(d); this date must be during 

the period beginning on the first day a 

distribution is made pursuant to closeout of the plan to a distributee who is 

not a missing distributee and ending on 

the last day such a distribution is made. 

Benefit transfer amount for a missing 

distributee of a subpart A plan means 

the amount determined by the plan 

administrator under § 4050.103(d) in the 

close-out of the plan. 

Close-out or close out with respect to 

a subpart A plan means the process of 

the final distribution or transfer of assets 

pursuant to the termination of the plan. 

De minimis means, with respect to the 

value of a benefit (or other amount), that 

the value does not exceed the amount 

specified under section 203(e)(1) of 

ERISA and section 411(a)(11)(A) of the 


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Code (without regard to plan 

provisions). 

Distributee means, with respect to a 

subpart A plan, a participant or 

beneficiary entitled to a distribution 

under the plan pursuant to the close-out 

of the plan. 

Missing, with respect to a distributee 

under a subpart A plan, means that any 

one or more of the following three 

conditions exists upon close-out of the 

plan. 

(1) The plan administrator does not 

know with reasonable certainty the 

location of the distributee. 

(2) Under the terms of the plan, the 

distributee’s benefit is to be paid in a 

lump sum without the distributee’s 

consent, and the distributee has not 

responded to a notice about the 

distribution of the lump sum. 

(3) Under the terms of the plan and 

any election made by the distributee, 

the distributee’s benefit is to be paid in 

a lump sum, but the distributee does not 

accept the lump sum. For this purpose, 

a lump sum paid by check is not 

accepted if the check remains uncashed 

after— 

(i) A ‘‘cash-by’’ date prescribed (on 

the check or in an accompanying notice) 

that is at least 45 days after the issuance 

of the check, or 

(ii) If no such ‘‘cash-by’’ date is so 

prescribed, the check’s stale date. 

Missing participants forms and 

instructions means the forms and 

instructions provided by PBGC for use 

in connection with the missing 

participants program. 

Missing participants interest rate 

means, for each month, the applicable 

federal mid-term rate (as determined by 

the Secretary of the Treasury pursuant 

to section 1274(d)(1)(C)(ii) of the Code) 

for that month, compounded monthly. 

Normal retirement date for a 

participant under a subpart A plan 

means the normal retirement date of the 

participant under the terms of the plan. 

Pay-status or pay status means one of 

the following (according to context): 

(1) With respect to a benefit, that 

payment of the benefit has actually 

started before the benefit determination 

date; or 

(2) With respect to a distributee, that 

payment of the distributee’s benefit has 

actually started before the benefit 

determination date. 

PBGC missing participants 

assumptions means the actuarial 

assumptions prescribed in §§ 4044.51 

through 4044.57 of this chapter with the 

following modifications: 

(1) The present value is determined as 

of the benefit determination date instead 

of the plan termination date. 

(2) The mortality assumption is a 

fixed blend of 50 percent of the healthy 

male mortality rates in § 4044.53(c)(1) of 

this chapter and 50 percent of the 

healthy female mortality rates in 

§ 4044.53(c)(2) of this chapter. 

(3) No adjustment is made for loading 

expenses under § 4044.52(d) of this 

chapter. 

(4) The interest assumption used is 

the assumption applicable to valuations 

occurring in January of the calendar 

year in which the benefit determination 

date occurs. 

(5) The assumed payment form of a 

benefit not in pay status is a straight life 

annuity. 

(6) Pre-retirement death benefits are 

disregarded. 

(7) Notwithstanding the expected 

retirement age (XRA) assumptions in 

§§ 4044.55 through 4044.57 of this 

chapter,— 

(i) In the case of a participant who is 

not in pay status and whose normal 

retirement date is on or after the benefit 

determination date, benefits are 

assumed to commence at the XRA, 

determined using the high retirement 

rate category under Table II–C of 

Appendix D to part 4044 of this chapter; 

(ii) In the case of a participant who is 

not in pay status and whose normal 

retirement date is before the benefit 

determination date, benefits are 

assumed to commence on the 

participant’s normal retirement date (or 

accrual cessation date if later); 

(iii) In the case of a participant who 

is in pay status, benefits are assumed to 

commence on the date on which 

benefits actually commenced; and 

(iv) In the case of a beneficiary, 

benefits are assumed to commence on 

the benefit determination date or, if 

later, the earliest date the beneficiary 

can begin to receive benefits. 

Plan lump sum assumptions means, 

with respect to a subpart A plan, the 

following: 

(1) If the plan specifies actuarial 

assumptions and methods to be used to 

calculate a lump sum distribution, such 

actuarial assumptions and methods, or 

(2) Otherwise, the actuarial 

assumptions specified under section 

205(g)(3) of ERISA and section 417(e)(3) 

of the Code, determined as of the benefit 

determination date, including use of the 

missing participants interest rate to 

calculate the present value as of the 

benefit determination date of a payment 

or payments missed in the past. 

QDRO means a qualified domestic 

relations order as defined in section 

206(d)(3) of ERISA and section 414(p) of 

the Code. 

Qualified survivor of a participant or 

beneficiary under a subpart A plan 

means, for any benefit with respect to 

the participant or beneficiary,— 

(1) A person who survives the 

participant or beneficiary and is entitled 

under applicable provisions of a QDRO 

to receive the benefit; 

(2) A person that is identified by the 

plan in a submission to PBGC by the 

plan as being entitled under applicable 

plan provisions (including elections, 

designations, and waivers consistent 

with such provisions) to receive the 

benefit; or 

(3) If no such person is so entitled, a 

survivor of the participant or beneficiary 

who is the participant’s or beneficiary’s 

living— 

(i) Spouse, or if none, 

(ii) Child, or if none, 

(iii) Parent, or if none, 

(iv) Sibling. 

Subpart A plan or plan means a plan 

to which this subpart A applies, as 

described in § 4050.101. 

§ 4050.103 Duties of plan administrator. 

(a) Providing for benefits. For each 

distributee who is missing upon closeout of a subpart A plan, the plan 

administrator must provide for the 

distributee’s plan benefits either— 

(1) By purchasing an irrevocable 

commitment from an insurer, or 

(2) By— 

(i) Determining the distributee’s 

benefit transfer amount under paragraph 

(d) of this section, and 

(ii) Transferring to PBGC as described 

in this subpart A an amount equal to the 

distributee’s benefit transfer amount. 

(b) Diligent search. For each 

distributee whose location the plan 

administrator does not know with 

reasonable certainty upon close-out of a 

subpart A plan, the plan administrator 

must have conducted a diligent search 

as described in § 4050.104. 

(c) Filing with PBGC. For each 

distributee who is missing upon closeout of a subpart A plan, the plan 

administrator must file with PBGC as 

described in § 4050.105. 

(d) Benefit transfer amount. The 

benefit transfer amount for a missing 

distributee is the amount determined by 

the plan administrator as of the benefit 

determination date using whichever one 

of the following three methods applies: 

(1) De minimis. If the single sum 

actuarial equivalent of the distributee’s 

benefits (including any payments 

missed in the past) determined using 

plan lump sum assumptions is de 

minimis, then the missing distributee’s 

benefit transfer amount is equal to that 

single sum. 

(2) Non-de minimis; single sum 

payment cannot be elected. If the single 

sum actuarial equivalent of the 

distributee’s benefits (including any 

payments missed in the past) 


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determined using plan lump sum 

assumptions is not de minimis, and a 

single sum payment cannot be elected, 

then the missing distributee’s benefit 

transfer amount is the present value of 

the distributee’s accrued benefit 

determined using PBGC missing 

participants assumptions, plus 

(i) For a missing distributee not in pay 

status whose normal retirement date (or 

accrual cessation date if later) precedes 

the benefit determination date, the 

aggregate value of payments of the 

straight life annuity that would have 

been payable beginning on the normal 

retirement date (or accrual cessation 

date if later), accumulated at the missing 

participants interest rate from the date 

each payment would have been made to 

the benefit determination date, 

assuming that the distributee survived 

to the benefit determination date, as 

determined by the plan administrator; 

or 

(ii) For a missing distributee in pay 

status, the aggregate value of payments 

of the pay status annuity due but not 

made, accumulated at the missing 

participants interest rate from each 

payment due date to the benefit 

determination date, assuming that the 

distributee survived to the benefit 

determination date. 

(3) Non-de minimis; single sum 

payment can be elected. If the single 

sum actuarial equivalent of the 

distributee’s benefits (including any 

payments missed in the past) 

determined using plan lump sum 

assumptions is not de minimis, and a 

single sum payment can be elected, then 

the missing distributee’s benefit transfer 

amount is the greater of the amounts 

determined using the methodology in 

paragraph (d)(1) or (d)(2) of this section. 

§ 4050.104 Diligent search. 

(a) Search requirement. The plan 

administrator of a subpart A plan must, 

within the time frame described in 

paragraph (d) of this section, have 

diligently searched for each distributee 

of the plan whose location the plan 

administrator does not know with 

reasonable certainty upon close-out, 

using one of the following two methods: 

(1) For any distributee, regardless of 

the size of the distributee’s benefit, the 

commercial locator service method 

described in paragraph (b) of this 

section; or 

(2) For a distributee whose normal 

retirement benefit is not more than $50 

per month, the records search method 

described in paragraph (c) of this 

section. 

(b) Commercial locator service 

method—(1) In general. Using the 

commercial locator service method 

means paying a commercial locator 

service to search for information to 

locate a distributee. 

(2) Meaning of ‘‘commercial locator 

service.’’ For purposes of this section, a 

commercial locator service is a business 

that holds itself out as a finder of lost 

persons for compensation using 

information from a database maintained 

by a consumer reporting agency (as 

defined in 15 U.S.C. 1681a(f)). 

(c) Records search method—(1) In 

general. Using the records search 

method means searching for information 

to locate a distributee by doing all of the 

following to the extent reasonably 

feasible and affordable: 

(i) Searching the records of the plan 

for information to locate the distributee. 

(ii) Searching the records of the plan’s 

contributing sponsor that is the most 

recent employer of the distributee for 

information to locate the distributee. 

(iii) Searching the records of each 

retirement or welfare plan of the plan’s 

contributing sponsor in which the 

distributee was a participant for 

information to locate the distributee. 

(iv) Contacting each beneficiary of the 

distributee identified from the records 

referred to in paragraphs (c)(1)(i), (ii), 

and (iii) of this section for information 

to locate the distributee. 

(v) Using an internet search method 

for which no fee is charged, such as a 

search engine, a network database, a 

public record database (such as those for 

licenses, mortgages, and real estate 

taxes) or a ‘‘social media’’ website. 

(2) Limits on method. For purposes of 

this section— 

(i) Searching is not feasible to the 

extent that, as a practical matter, it is 

thwarted by legal or practical lack of 

access to records, and 

(ii) Searching is not affordable to the 

extent that the cost of searching 

(including the value of labor) is more 

than a reasonable fraction of the benefit 

of the distributee being searched for. In 

no event would searching need to be 

pursued beyond the point where the 

cost equals the value of the benefit. 

(d) Time frame. A search for a 

distributee under this section must have 

been made within nine months before a 

filing is made under § 4050.105 

identifying the distributee as a missing 

distributee. 

§ 4050.105 Filing with PBGC. 

(a) What to file. The plan 

administrator of a subpart A plan must 

file with PBGC the information 

specified in the missing participants 

forms and instructions and, for a 

missing distributee referred to in 

§ 4050.103(a)(2), payment of— 

(1) The benefit transfer amount for the 

missing distributee; 

(2) If the benefit transfer amount is 

paid more than 90 days after the benefit 

determination date, interest on the 

benefit transfer amount computed at the 

missing participants interest rate for the 

period beginning on the 90th day after 

the benefit determination date and 

ending on the date the benefit transfer 

amount is paid to PBGC; and 

(3) Any fee provided for in the 

missing participants forms and 

instructions. 

(b) When to file. The plan 

administrator must file the information 

and payments referred to in paragraph 

(a) of this section in accordance with the 

missing participants forms and 

instructions. Payment of a benefit 

transfer amount will, if considered 

timely made for purposes of this 

paragraph (b), be considered timely 

made for purposes of part 4041 of this 

chapter. 

(c) Place, method and date of filing; 

time periods. (1) For rules about where 

to file, see § 4000.4 of this chapter. 

(2) For rules about permissible 

methods of filing with PBGC under this 

subpart, see subpart A of part 4000 of 

this chapter. 

(3) For rules about the date that a 

submission under this subpart was filed 

with PBGC, see subpart C of part 4000 

of this chapter. 

(4) For rules about any time period for 

filing under this subpart, see subpart D 

of part 4000 of this chapter. 

(d) Supplemental information. Within 

30 days after a written request by PBGC 

(or such other time as may be specified 

in the request), the plan administrator of 

a subpart A plan required to file under 

paragraph (a) of this section must file 

with PBGC supplemental information 

for any proper purpose under the 

missing participants program. 

(e) Reliance. As administrator of the 

missing participants program, PBGC 

will rely on determinations made and 

information reported by plan 

administrators in connection with the 

program. This reliance does not affect 

PBGC’s authority as administrator of the 

title IV insurance program to audit or 

make inquiries of subpart A plans, 

including about the amount to which a 

missing distributee may be entitled. 

§ 4050.106 Missing participant benefits. 

(a) In general—(1) Benefit transfer 

amount not paid. If a subpart A plan 

files with PBGC information about an 

irrevocable commitment provided by 

the subpart A plan for a missing 

distributee, PBGC will provide 

information about the irrevocable 

commitment to the distributee or 

another claimant that may be entitled to 


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payment pursuant to the irrevocable 

commitment. 

(2) Benefit transfer amount paid. If a 

subpart A plan pays PBGC a benefit 

transfer amount for a missing 

distributee, PBGC will pay benefits with 

respect to the missing distributee in 

accordance with this section, subject to 

the provisions of a QDRO. 

(b) Benefits for missing distributees 

who are participants. Paragraphs (c), (d), 

(e), and (k) of this section describe the 

benefits that PBGC will pay to a non-pay 

status missing participant of a subpart A 

plan who claims a benefit under the 

missing participants program. 

(c) De minimis benefit. If the benefit 

transfer amount of a participant 

described in paragraph (b) of this 

section is de minimis, PBGC will pay 

the participant a lump sum equal to the 

accumulated single sum. 

(d) Non-de minimis benefit of 

unmarried participant. If the benefit 

transfer amount of an unmarried 

participant described in paragraph (b) of 

this section is not de minimis, PBGC 

will pay the participant either the 

annuity described in paragraph (d)(1) of 

this section, beginning not before age 

55, and (if applicable) the make-up 

amount described in paragraph (d)(2) of 

this section; or, if the participant could 

have elected a lump sum under the 

subpart A plan, and the participant so 

elects under the missing participants 

program, the lump sum described in 

paragraph (d)(3) of this section. 

(1) Annuity. The annuity described in 

this paragraph (d)(1) is either— 

(i) Straight life annuity. A straight life 

annuity in the amount that the subpart 

A plan would have paid the participant, 

starting at the date that PBGC payments 

start (or, if earlier, the later of the 

participant’s normal retirement date or 

accrual cessation date), as reported to 

PBGC by the subpart A plan (including 

any early retirement subsidies), or 

through linear interpolation for 

participants who start payments 

between integral ages; or 

(ii) Other form of annuity. At the 

participant’s election, any form of 

annuity available to the participant 

under § 4022.8 of this chapter, in an 

amount that is actuarially equivalent to 

the straight life annuity in paragraph 

(d)(1)(i) of this section as of the date that 

PBGC payments start (or, if earlier, the 

later of the participant’s normal 

retirement date or accrual cessation 

date), determined using the actuarial 

assumptions in § 4022.8(c)(7) of this 

chapter. 

(2) Make-up amount. If PBGC begins 

to pay the annuity under paragraph 

(d)(1) of this section after the normal 

retirement date (or accrual cessation 

date if later), the make-up amount 

described in this paragraph (d)(2) is a 

lump sum equal to the aggregate value 

of payments of the annuity that would 

have been payable to the participant (in 

the elected form) beginning on the 

normal retirement date (or accrual 

cessation date if later), accumulated at 

the missing participants interest rate 

from the date each payment would have 

been made to the date when PBGC 

begins to pay the annuity. 

(3) Lump sum. The lump sum 

described in this paragraph (d)(3) is 

equal to the participant’s accumulated 

single sum. 

(e) Non-de minimis benefit of married 

participant. If the benefit transfer 

amount of a married participant 

described in paragraph (b) of this 

section is not de minimis, PBGC will 

pay the participant either the annuity 

described in paragraph (e)(1) of this 

section, beginning not before age 55, 

and (if applicable) the make-up amount 

described in paragraph (e)(2) of this 

section; or, if the participant could have 

elected a lump sum under the subpart 

A plan, and the participant so elects 

under the missing participants program 

with the consent of the participant’s 

spouse, the lump sum described in 

paragraph (e)(3) of this section. 

(1) Annuity. The annuity described in 

this paragraph (e)(1) is either— 

(i) Joint and survivor annuity. A joint 

and 50 percent survivor annuity in an 

amount that is actuarially equivalent to 

the straight life annuity under paragraph 

(d)(1)(i) of this section as of the date that 

PBGC payments start (or, if earlier, the 

later of the participant’s normal 

retirement date or accrual cessation 

date), determined using the actuarial 

assumptions in § 4022.8(c)(7) of this 

chapter; or 

(ii) Other form of annuity. At the 

participant’s election, with the consent 

of the participant’s spouse, any form of 

annuity available to the participant 

under § 4022.8 of this chapter, in an 

amount that is actuarially equivalent to 

the joint and 50 percent survivor 

annuity under paragraph (e)(1)(i) of this 

section as of the date that PBGC 

payments start (or, if earlier, the later of 

the participant’s normal retirement date 

or accrual cessation date), determined 

using the actuarial assumptions in 

§ 4022.8(c)(7) of this chapter. 

(2) Make-up amount. If PBGC begins 

to pay the annuity under paragraph 

(e)(1) of this section after the normal 

retirement date (or accrual cessation 

date if later), the make-up amount 

described in this paragraph (e)(2) is a 

lump sum equal to the aggregate value 

of payments of the annuity that would 

have been payable to the participant 

beginning on the normal retirement date 

(or accrual cessation date if later), 

accumulated at the missing participants 

interest rate from the date each payment 

would have been made to the date when 

PBGC begins to pay the annuity. 

(3) Lump sum. The lump sum 

described in this paragraph (e)(3) is 

equal to the participant’s accumulated 

single sum. 

(f) Benefits with respect to deceased 

missing distributees who were 

participants. Paragraphs (g), (h), (i), (j), 

and (k) of this section describe the 

benefits that PBGC will pay with respect 

to a non-pay status missing participant 

of a subpart A plan who dies without 

receiving a benefit under the missing 

participants program. 

(g) De minimis benefit. If the benefit 

transfer amount of a participant 

described in paragraph (f) of this section 

is de minimis, PBGC will pay to the 

qualified survivor(s) of the participant a 

lump sum equal to the participant’s 

accumulated single sum. 

(h) Non-de minimis benefit; 

unmarried participant. In the case of an 

unmarried participant described in 

paragraph (f) of this section whose 

benefit transfer amount is not de 

minimis,— 

(1) Death before normal retirement 

date. If the participant dies before the 

normal retirement date (or accrual 

cessation date if later), PBGC will pay 

no benefits with respect to the 

participant; and 

(2) Death after normal retirement 

date. If the participant dies on or after 

the normal retirement date (or accrual 

cessation date if later), PBGC will pay to 

the participant’s qualified survivor(s) an 

amount equal to the aggregate value of 

payments of the straight life annuity 

described in paragraph (d)(1)(i) of this 

section that would have been payable to 

the participant from the normal 

retirement date (or accrual cessation 

date if later) to the participant’s date of 

death, accumulated at the missing 

participants interest rate from the date 

each payment would have been made to 

the date when PBGC pays the qualified 

survivor(s). 

(i) Non-de minimis benefit; married 

participant with living spouse. In the 

case of a married participant described 

in paragraph (f) of this section whose 

benefit transfer amount is not de 

minimis and whose spouse survives the 

participant and claims a benefit under 

the missing participants program, PBGC 

will pay the spouse, beginning not 

before the participant would have 

reached age 55, the annuity (if any) 

described in paragraph (i)(1) of this 

section and the make-up amounts (if 

applicable) described in paragraph (i)(2) 


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of this section, except that PBGC will 

pay the spouse, as a lump sum, the 

small benefit described in paragraph 

(i)(3) of this section. 

(1) Annuity. The annuity described in 

this paragraph (i)(1) is the survivor 

portion of a joint and 50 percent 

survivor annuity that is actuarially 

equivalent as of the assumed starting 

date (determined using the actuarial 

assumptions in § 4022.8(c)(7) of this 

chapter) to the straight life annuity in 

the amount that the subpart A plan 

would have paid the participant with an 

assumed starting date of— 

(i) The date when the participant 

would have reached age 55, if the 

participant died before that date, or 

(ii) The participant’s date of death, if 

the participant died between age 55 and 

the normal retirement date (or accrual 

cessation date if later), or 

(iii) The normal retirement date (or 

accrual cessation date if later), if the 

participant died after that date. 

(2) Make-up amounts. The make-up 

amounts described in this paragraph 

(i)(2) are the amounts described in 

paragraphs (i)(2)(i) and (ii) of this 

section. 

(i) Payments from participant’s death 

or 55th birthday to commencement of 

survivor annuity. The make-up amount 

described in this paragraph (i)(2)(i) is a 

lump sum equal to the aggregate value 

of payments of the survivor portion of 

the joint and 50 percent survivor 

annuity described in paragraph (i)(1) of 

this section that would have been 

payable to the spouse beginning on the 

later of the participant’s date of death or 

the date when the participant would 

have reached age 55, accumulated at the 

missing participants interest rate from 

the date each payment would have been 

made to the date when PBGC pays the 

spouse. 

(ii) Payments from normal retirement 

date to participant’s death. The makeup amount described in this paragraph 

(i)(2)(ii) is a lump sum equal to the 

aggregate value of payments (if any) of 

the joint portion of the joint and 50 

percent survivor annuity described in 

paragraph (i)(1) of this section that 

would have been payable to the 

participant from the normal retirement 

date (or accrual cessation date if later) 

to the participant’s date of death 

thereafter, accumulated at the missing 

participants interest rate from the date 

each payment would have been made to 

the date when PBGC pays the spouse. 

(3) Small benefit. If the sum of the 

actuarial present value of the annuity 

described in paragraph (i)(1) of this 

section plus the make-up amounts 

described in paragraph (i)(2) of this 

section is de minimis, then the lump 

sum that PBGC will pay the spouse 

under this paragraph (i)(3) is an amount 

equal to that sum. For this purpose, the 

actuarial present value of the annuity is 

determined using the actuarial 

assumptions in § 4022.8(c)(7) of this 

chapter as of the date when PBGC pays 

the spouse. 

(j) Non-de minimis benefit; married 

participant with deceased spouse. In the 

case of a married participant described 

in paragraph (f) of this section whose 

benefit transfer amount is not de 

minimis and whose spouse survives the 

participant but dies without receiving a 

benefit under the missing participants 

program, PBGC will pay to the qualified 

survivor(s) of the participant’s spouse 

the make-up amount described in 

paragraph (j)(1) of this section and to the 

qualified survivor(s) of the participant 

the make-up amount described in 

paragraph (j)(2) of this section. 

(1) Payments from participant’s death 

or 55th birthday to spouse’s death. The 

make-up amount described in this 

paragraph (j)(1) is a lump sum equal to 

the aggregate value of payments of the 

survivor portion of the joint and 50 

percent survivor annuity described in 

paragraph (i)(1) of this section that 

would have been payable to the spouse 

from the later of the participant’s date 

of death or the date when the 

participant would have reached age 55 

to the spouse’s date of death, 

accumulated at the missing participants 

interest rate from the date each payment 

would have been made to the date when 

PBGC pays the spouse’s qualified 

survivor(s). 

(2) Payments from normal retirement 

date to participant’s death. The makeup amount described in this paragraph 

(j)(2) is a lump sum equal to the 

aggregate value of payments of the joint 

portion of the joint and 50 percent 

survivor annuity described in paragraph 

(i)(1) of this section that would have 

been payable to the participant from the 

normal retirement date (or accrual 

cessation date if later) to the 

participant’s date of death thereafter, 

accumulated at the missing participants 

interest rate from the date each payment 

would have been made to the date when 

PBGC pays the participant’s qualified 

survivor(s). 

(k) Benefits under contributory plans. 

If a subpart A plan reports to PBGC that 

a portion of a missing participant’s 

benefit transfer amount represents 

accumulated contributions as described 

in section 204(c)(2)(C) of ERISA and 

section 411(c)(2)(C) of the Code, PBGC 

will pay with respect to the missing 

participant at least the amount of 

accumulated contributions as reported 

by the subpart A plan, accumulated at 

the missing participants interest rate 

from the benefit determination date to 

the date when PBGC makes payment. 

(l) Date for determining marital status. 

For purposes of this section, whether a 

participant is married, and if so the 

identity of the spouse, is determined as 

of the earlier of— 

(1) The date the participant receives 

or begins to receive a benefit, or 

(2) The date the participant dies. 

§ 4050.107 PBGC discretion. 

PBGC may in appropriate 

circumstances extend deadlines, excuse 

noncompliance, and grant waivers with 

regard to any provision of this subpart 

to promote the purposes of the missing 

participants program and title IV of 

ERISA. Like circumstances will be 

treated in like manner under this 

section. 

Subpart B—Defined Contribution Plans 

§ 4050.201 Purpose and scope. 

(a) In general. This subpart describes 

PBGC’s missing participants program for 

single-employer and multiemployer 

defined contribution retirement plans. 

The missing participants program is a 

program to hold retirement benefits for 

missing participants and beneficiaries in 

terminated retirement plans and to help 

them find and receive the benefits being 

held for them. For a plan to which this 

subpart applies, this subpart describes 

what the plan must do upon plan 

termination if it elects to use the 

missing participants program for 

missing participants and beneficiaries 

who are entitled to distributions. This 

subpart applies to a plan only if it is a 

plan— 

(1) That— 

(i) Is a defined contribution 

(individual account) plan described in 

section 3(34) of ERISA; or 

(ii) Is treated as a defined contribution 

(individual account) plan under section 

(3)(35) of ERISA (to the extent so 

treated); 

(2) That is described in section 

4021(a) of ERISA and not in any 

paragraph of section 4021(b) of ERISA 

other than paragraph (1), (5), (12), or 

(13), including a plan described in 

section 403(b) of the Code under which 

benefits are provided through custodial 

accounts described in section 403(b)(7) 

of the Code; 

(3) That, if it is a transferring plan, 

pays all benefit transfer amounts to 

PBGC in money, consistent with plan 

provisions and applicable law; and 

(4) That terminates and closes out. 

(b) Defined contribution plans that 

are part of defined benefit plans. This 

subpart does not fail to apply to a plan 


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merely because the plan is described in 

the same plan document as a defined 

benefit plan (to which this subpart does 

not apply). For example, this subpart 

may apply to employee contributions 

(or interest or earnings thereon) held as 

an individual account under a defined 

benefit plan. 

(c) Defined contribution plans that are 

abandoned plans. This subpart does not 

fail to apply to a plan merely because 

the plan is an abandoned plan, as 

defined in 29 CFR 2578.1. 

§ 4050.202 Definitions. 

The following terms are defined in 

§ 4001.2 of this chapter: Annuity, Code, 

ERISA, PBGC, and person. In addition, 

for purposes of this subpart: 

Accumulated single sum means, with 

respect to a missing distributee, the 

distributee’s benefit transfer amount 

accumulated at the missing participants 

interest rate from the date when the 

subpart B plan pays PBGC the benefit 

transfer amount for the missing 

distributee to the date when PBGC 

makes or commences payment to or 

with respect to the distributee. 

Benefit conversion assumptions 

means, with respect to an annuity, the 

applicable mortality table and 

applicable interest rate under section 

205(g)(3) of ERISA and section 417(e)(3) 

of the Code for January of the calendar 

year in which PBGC begins paying the 

annuity. 

Benefit transfer amount for a missing 

distributee in a transferring plan means 

the amount available for distribution to 

the distributee in connection with the 

close-out of the subpart B plan. 

Close-out or close out with respect to 

a subpart B plan means the process of 

the final distribution or transfer of assets 

pursuant to the termination of the 

subpart B plan. 

De minimis means, with respect to the 

value of a benefit (or other amount), that 

the value does not exceed the amount 

specified under section 203(e)(1) of 

ERISA and section 411(a)(11)(A) of the 

Code (without regard to plan 

provisions). 

Distributee means, with respect to a 

subpart B plan, a participant or 

beneficiary entitled to a distribution 

under the plan pursuant to the close-out 

of the plan, except that a person is not 

a distributee if the subpart B plan 

transfers assets to another pension plan 

(within the meaning of section 3(2) of 

ERISA) to pay the person’s benefits. 

Missing, with respect to a distributee 

under a subpart B plan, means that any 

one or more of the following three 

conditions exists upon close-out of the 

plan. 

(1) The plan does not know with 

reasonable certainty the location of the 

distributee. 

(2) The distributee has not elected a 

form of distribution in response to a 

notice about the distribution. 

(3) Under the terms of the plan and 

any election made by the distributee, 

the distributee’s benefit is to be paid in 

a lump sum, but the distributee does not 

accept the lump sum. For this purpose, 

a lump sum paid by check is not 

accepted if the check remains uncashed 

after— 

(i) A ‘‘cash-by’’ date prescribed (on 

the check or in an accompanying notice) 

that is at least 45 days after the issuance 

of the check, or 

(ii) If no such ‘‘cash-by’’ date is so 

prescribed, the check’s stale date. 

Missing participants forms and 

instructions means the forms and 

instructions provided by PBGC for use 

in connection with the missing 

participants program. 

Missing participants interest rate 

means, for each month, the applicable 

federal mid-term rate (as determined by 

the Secretary of the Treasury pursuant 

to section 1274(d)(1)(C)(ii) of the Code) 

for that month, compounded monthly. 

Notifying plan means a subpart B plan 

that elects notifying plan status in 

accordance with § 4050.203. 

QDRO means a qualified domestic 

relations order as defined in section 

206(d)(3) of ERISA and section 414(p) of 

the Code. 

Qualified survivor of a participant or 

beneficiary under a subpart B plan 

means, for any benefit with respect to 

the participant or beneficiary,— 

(1) A person who survives the 

participant or beneficiary and is entitled 

under applicable provisions of a QDRO 

to receive the benefit; 

(2) A person that is identified by the 

plan in a submission to PBGC by the 

plan as being entitled under applicable 

plan provisions (including elections, 

designations, and waivers consistent 

with such provisions) to receive the 

benefit; or 

(3) If no such person is so entitled, a 

survivor of the participant or beneficiary 

who is the participant’s or beneficiary’s 

living— 

(i) Spouse, or if none, 

(ii) Child, or if none, 

(iii) Parent, or if none, 

(iv) Sibling. 

Subpart B plan or plan means a plan 

to which this subpart B applies, as 

described in § 4050.201. 

Transferring plan means a subpart B 

plan that elects transferring plan status 

in accordance with § 4050.203. 

§ 4050.203 Options and duties of plan. 

(a) Options. A subpart B plan that is 

closing out upon plan termination may 

(but need not) elect, by filing under 

§ 4050.205, that the subpart B plan— 

(1) Will be a ‘‘transferring plan,’’ that 

is, will pay a benefit transfer amount to 

PBGC for each distributee who is 

missing upon close-out of the plan and 

will be bound by the provisions of this 

subpart B to the extent that they apply 

to transferring plans, or 

(2) Will be a ‘‘notifying plan,’’ that is, 

will notify PBGC of the disposition of 

the benefits of each distributee 

identified in the filing who is missing 

upon close-out of the plan and will, 

with respect to those distributees, be 

bound by the provisions of this subpart 

B to the extent that they apply to 

notifying plans. 

(b) Diligent search—(1) In general. 

Except as provided in paragraph (b)(2) 

of this section, for each distributee 

whose location the plan does not know 

with reasonable certainty upon closeout of a subpart B plan, the plan must 

have conducted a diligent search as 

described in § 4050.204. 

(2) Notifying plans. For a notifying 

plan, the requirement of paragraph 

(b)(1) of this section applies only to 

distributees identified in the filing with 

PBGC. 

(c) Filing with PBGC—(1) In general. 

Except as provided in paragraph (c)(2) 

of this section, for each distributee who 

is missing upon close-out of a subpart 

B plan, the plan must file with PBGC as 

described in § 4050.205. 

(2) Notifying plans. For a notifying 

plan, the requirement of paragraph (c)(1) 

of this section applies only to 

distributees identified in the filing with 

PBGC. 

§ 4050.204 Diligent search. 

(a) Search requirement—(1) In 

general. Except as provided in 

paragraph (a)(2) of this section, a 

subpart B plan must, within the time 

frame described in paragraph (b) of this 

section, have diligently searched for 

each distributee of the plan whose 

location the plan does not know with 

reasonable certainty upon close-out in 

accordance with regulations and other 

applicable guidance issued by the 

Secretary of Labor under section 404 of 

ERISA. 

(2) Notifying plans. For a notifying 

plan, the requirement of paragraph (a)(1) 

of this section applies only to 

distributees identified in the filing with 

PBGC. 

(b) Time frame. A search for a missing 

distributee must be made within nine 

months before a filing is made under 


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60824 Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Rules and Regulations 

§ 4050.205 identifying the distributee as 

a missing distributee. 

§ 4050.205 Filing with PBGC. 

(a) What to file. A subpart B plan must 

file with PBGC the information 

specified in the missing participants 

forms and instructions, and if the plan 

is a transferring plan, payment of— 

(1) The benefit transfer amount for the 

missing distributee; and 

(2) Any fee provided for in the 

missing participants forms and 

instructions. 

(b) When to file. The plan must file 

the information and payments referred 

to in paragraph (a) of this section in 

accordance with the missing 

participants forms and instructions. 

(c) Place, method and date of filing; 

time periods. (1) For rules about where 

to file, see § 4000.4 of this chapter. 

(2) For rules about permissible 

methods of filing with PBGC under this 

subpart, see subpart A of part 4000 of 

this chapter. 

(3) For rules about the date that a 

submission under this subpart was filed 

with PBGC, see subpart C of part 4000 

of this chapter. 

(4) For rules about any time period for 

filing under this subpart, see subpart D 

of part 4000 of this chapter. 

(d) Supplemental information. Within 

30 days after a written request by PBGC 

(or such other time as may be specified 

in the request), the plan administrator of 

a subpart B plan required to file under 

paragraph (a) of this section must file 

with PBGC supplemental information 

for any proper purpose under the 

missing participants program. 

(e) Reliance. As administrator of the 

missing participants program, PBGC 

will rely on determinations made and 

information reported by plans in 

connection with the program. 

§ 4050.206 Missing participant benefits. 

(a) In general—(1) Notifying plan. If a 

notifying plan files with PBGC 

information about a disposition of 

benefits made by the subpart B plan for 

a missing distributee, PBGC will 

provide information about the 

disposition of benefits to the distributee 

or another claimant that may be entitled 

to the benefits. 

(2) Transferring plan. If a transferring 

plan pays PBGC a benefit transfer 

amount for a missing distributee, PBGC 

will pay benefits with respect to the 

missing distributee in accordance with 

this section, subject to the provisions of 

a QDRO. 

(b) Benefits for missing distributees 

who are participants. Paragraphs (c), (d), 

and (e) of this section describe the 

benefits that PBGC will pay to a missing 

participant of a subpart B plan who 

claims a benefit under the missing 

participants program. 

(c) De minimis benefit. If the benefit 

transfer amount of a participant 

described in paragraph (b) of this 

section is de minimis, PBGC will pay 

the participant a lump sum equal to the 

accumulated single sum. 

(d) Non-de minimis benefit of 

unmarried participant. If the benefit 

transfer amount of an unmarried 

participant described in paragraph (b) of 

this section is not de minimis, PBGC 

will pay the participant either the 

annuity described in paragraph (d)(1) of 

this section, beginning not before age 

55; or, if the participant so elects, the 

lump sum described in paragraph (d)(2) 

of this section. 

(1) Annuity. The annuity described in 

this paragraph (d)(1) is, at the 

participant’s election, any form of 

annuity available to the participant 

under § 4022.8 of this chapter, in an 

amount that is actuarially equivalent, 

under the benefit conversion 

assumptions, to the participant’s 

accumulated single sum. 

(2) Lump sum. The lump sum 

described in this paragraph (d)(2) is the 

participant’s accumulated single sum. 

(e) Non-de minimis benefit of married 

participant. If the benefit transfer 

amount of a married participant 

described in paragraph (b) of this 

section is not de minimis, PBGC will 

pay the participant either the annuity 

described in paragraph (e)(1) of this 

section, beginning not before age 55; or, 

if the participant so elects with the 

consent of the participant’s spouse, the 

lump sum described in paragraph (e)(2) 

of this section. 

(1) Annuity. The annuity described in 

this paragraph (e)(1) is either— 

(i) Joint and survivor annuity. A joint 

and 50 percent survivor annuity in an 

amount that is actuarially equivalent, 

under the benefit conversion 

assumptions, to the participant’s 

accumulated single sum; or 

(ii) Other form of annuity. At the 

participant’s election, with the consent 

of the participant’s spouse, any form of 

annuity available to the participant 

under § 4022.8 of this chapter, in an 

amount that is actuarially equivalent, 

under the benefit conversion 

assumptions, to the participant’s 

accumulated single sum. 

(2) Lump sum. The lump sum 

described in this paragraph (e)(2) is the 

participant’s accumulated single sum. 

(f) Benefits with respect to deceased 

missing distributees who were 

participants. Paragraphs (g), (h), and (i) 

of this section describe the benefits that 

PBGC will pay with respect to a missing 

participant of a subpart B plan who dies 

without receiving a benefit under the 

missing participants program. 

(g) De minimis benefit. If the benefit 

transfer amount of a participant 

described in paragraph (f) of this section 

is de minimis, and the participant’s 

qualified survivor claims a benefit 

under the missing participants program, 

PBGC will pay the claimant a lump sum 

equal to the participant’s accumulated 

single sum. 

(h) Non-de minimis benefit; nonspousal qualified survivor. If the benefit 

transfer amount of a married or 

unmarried participant described in 

paragraph (f) of this section is not de 

minimis, and the participant’s qualified 

survivor is not the participant’s 

surviving spouse and claims a benefit 

under the missing participants program, 

PBGC will pay the claimant a lump sum 

equal to the participant’s accumulated 

single sum. 

(i) Non-de minimis benefit; surviving 

spouse is qualified survivor. If the 

benefit transfer amount of a married 

participant described in paragraph (f) of 

this section is not de minimis, and the 

participant’s qualified survivor is the 

participant’s surviving spouse and 

claims a benefit under the missing 

participants program, PBGC will, at the 

spouse’s election, either pay the spouse, 

beginning not before the participant 

would have reached age 55, the annuity 

described in paragraph (i)(1) of this 

section; or pay the spouse the lump sum 

described in paragraph (i)(2) of this 

section. 

(1) Annuity. The annuity described in 

this paragraph (i)(1) is a straight life 

annuity for the life of the spouse in an 

amount that is actuarially equivalent, 

under the benefit conversion 

assumptions, to the participant’s 

accumulated single sum. 

(2) Lump sum. The lump sum 

described in this paragraph (i)(2) is a 

lump sum equal to the participant’s 

accumulated single sum. 

(j) Date for determining marital status. 

For purposes of this section, whether a 

participant is married, and if so the 

identity of the spouse, is determined as 

of the earlier of— 

(1) The date the participant receives 

or begins to receive a benefit, or 

(2) The date the participant dies. 

§ 4050.207 PBGC discretion. 

PBGC may in appropriate 

circumstances extend deadlines, excuse 

noncompliance, and grant waivers with 

regard to any provision of this subpart 

to promote the purposes of the missing 

participants program and title IV of 

ERISA. Like circumstances will be 


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treated in like manner under this 

section. 

Subpart C—Certain Defined Benefit 

Plans Not Covered by Title IV 

§ 4050.301 Purpose and scope. 

(a) In general. This subpart describes 

PBGC’s missing participants program for 

small professional service defined 

benefit retirement plans not covered by 

title IV of ERISA. The missing 

participants program is a program to 

hold retirement benefits for missing 

participants and beneficiaries in 

terminated retirement plans and to help 

them find and receive the benefits being 

held for them. For a plan to which this 

subpart applies, this subpart describes 

what the plan must do upon plan 

termination if it elects to use the 

missing participants program for 

missing participants and beneficiaries 

who are entitled to distributions. This 

subpart applies to a plan only if it is a 

single-employer defined benefit plan 

that— 

(1) Is described in section 4021(a) of 

ERISA and not in any paragraph of 

section 4021(b) of ERISA other than 

paragraph (13), and 

(2) Terminates and closes out with 

sufficient assets to satisfy all liabilities 

with respect to employees and their 

beneficiaries. 

(b) Individual account plans. This 

subpart does not apply to an individual 

account plan under section 3(34) of 

ERISA, even if it is described in the 

same plan document as a plan to which 

this subpart applies. This subpart also 

does not apply to a plan to the extent 

that it is treated as an individual 

account plan under section 3(35)(B) of 

ERISA. For example, this subpart does 

not apply to employee contributions (or 

interest or earnings thereon) held as an 

individual account. (Subpart B deals 

with individual account plans.) 

§ 4050.302 Definitions. 

The following terms are defined in 

§ 4001.2 of this chapter: Annuity, Code, 

ERISA, PBGC, person, and plan 

administrator. In addition, for purposes 

of this subpart: 

Accrual cessation date for a 

participant under a subpart C plan 

means the date the participant stopped 

accruing benefits under the terms of the 

plan. 

Accumulated single sum means, with 

respect to a missing distributee, the 

distributee’s benefit transfer amount 

accumulated at the missing participants 

interest rate from the benefit 

determination date to the date when 

PBGC makes or commences payment to 

or with respect to the distributee. 

Benefit determination date with 

respect to a subpart C plan means the 

single date selected by the plan 

administrator for valuing benefits under 

§ 4050.303(d); this date must be during 

the period beginning on the first day a 

distribution is made pursuant to closeout of the plan to a distributee who is 

not a missing distributee and ending on 

the last day such a distribution is made. 

Benefit transfer amount for a missing 

distributee in a transferring plan means 

the amount determined by the plan 

administrator under § 4050.303(d) in the 

close-out of the subpart C plan. 

Close-out or close out with respect to 

a subpart C plan means the process of 

the final distribution or transfer of assets 

pursuant to the termination of the 

subpart C plan. 

De minimis means, with respect to the 

value of a benefit (or other amount), that 

the value does not exceed the amount 

specified under section 203(e)(1) of 

ERISA and section 411(a)(11)(A) of the 

Code (without regard to plan 

provisions). 

Distributee means, with respect to a 

subpart C plan, a participant or 

beneficiary entitled to a distribution 

under the subpart C plan pursuant to 

the close-out of the subpart C plan, 

except that a person is not a distributee 

if the subpart C plan transfers assets to 

another pension plan (within the 

meaning of section 3(2) of ERISA) to pay 

the person’s benefits. 

Missing, with respect to a distributee 

under a subpart C plan, means that any 

one or more of the following three 

conditions exists upon close-out of the 

plan. 

(1) The plan administrator does not 

know with reasonable certainty the 

location of the distributee. 

(2) Under the terms of the plan, the 

distributee’s benefit is to be paid in a 

lump sum without the distributee’s 

consent, and the distributee has not 

responded to a notice about the 

distribution of the lump sum. 

(3) Under the terms of the plan and 

any election made by the distributee, 

the distributee’s benefit is to be paid in 

a lump sum, but the distributee does not 

accept the lump sum. For this purpose, 

a lump sum paid by check is not 

accepted if the check remains uncashed 

after— 

(i) A ‘‘cash-by’’ date prescribed (on 

the check or in an accompanying notice) 

that is at least 45 days after the issuance 

of the check, or 

(ii) If no such ‘‘cash-by’’ date is so 

prescribed, the check’s stale date. 

Missing participants forms and 

instructions means the forms and 

instructions provided by PBGC for use 

in connection with the missing 

participants program. 

Missing participants interest rate 

means, for each month, the applicable 

federal mid-term rate (as determined by 

the Secretary of the Treasury pursuant 

to section 1274(d)(1)(C)(ii) of the Code) 

for that month, compounded monthly. 

Normal retirement date for a 

participant under a subpart C plan 

means the normal retirement date of the 

participant under the terms of the plan. 

Notifying plan means a subpart C plan 

for which the plan administrator elects 

notifying plan status in accordance with 

§ 4050.303. 

Pay-status or pay status means one of 

the following (according to context): 

(1) With respect to a benefit, that 

payment of the benefit has actually 

started before the benefit determination 

date; or 

(2) With respect to a distributee, that 

payment of the distributee’s benefit has 

actually started before the benefit 

determination date. 

PBGC missing participants 

assumptions means the actuarial 

assumptions prescribed in §§ 4044.51 

through 4044.57 of this chapter with the 

following modifications: 

(1) The present value is determined as 

of the benefit determination date instead 

of the plan termination date. 

(2) The mortality assumption is a 

fixed blend of 50 percent of the healthy 

male mortality rates in § 4044.53(c)(1) of 

this chapter and 50 percent of the 

healthy female mortality rates in 

§ 4044.53(c)(2) of this chapter. 

(3) No adjustment is made for loading 

expenses under § 4044.52(d) of this 

chapter. 

(4) The interest assumption used is 

the assumption applicable to valuations 

occurring in January of the calendar 

year in which the benefit determination 

date occurs. 

(5) The assumed payment form of a 

benefit not in pay status is a straight life 

annuity. 

(6) Pre-retirement death benefits are 

disregarded. 

(7) Notwithstanding the expected 

retirement age (XRA) assumptions in 

§§ 4044.55 through 4044.57 of this 

chapter,— 

(i) In the case of a participant who is 

not in pay status and whose normal 

retirement date is on or after the benefit 

determination date, benefits are 

assumed to commence at the XRA, 

determined using the high retirement 

rate category under Table II–C of 

Appendix D to part 4044 of this chapter; 

(ii) In the case of a participant who is 

not in pay status and whose normal 

retirement date is before the benefit 

determination date, benefits are 


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60826 Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Rules and Regulations 

assumed to commence on the 

participant’s normal retirement date (or 

accrual cessation date if later); 

(iii) In the case of a participant who 

is in pay status, benefits are assumed to 

commence on the date on which 

benefits actually commenced; and 

(iv) In the case of a beneficiary, 

benefits are assumed to commence on 

the benefit determination date or, if 

later, the earliest date the beneficiary 

can begin to receive benefits. 

Plan lump sum assumptions means, 

with respect to a subpart C plan, the 

following: 

(1) If the plan specifies actuarial 

assumptions and methods to be used to 

calculate a lump sum distribution, such 

actuarial assumptions and methods, or 

(2) Otherwise, the actuarial 

assumptions specified under section 

205(g)(3) of ERISA and section 417(e)(3) 

of the Code, determined as of the benefit 

determination date, including use of the 

missing participants interest rate to 

calculate the present value as of the 

benefit determination date of a payment 

or payments missed in the past. 

QDRO means a qualified domestic 

relations order as defined in section 

206(d)(3) of ERISA and section 414(p) of 

the Code. 

Qualified survivor of a participant or 

beneficiary under a subpart C plan 

means, for any benefit with respect to 

the participant or beneficiary— 

(1) A person who survives the 

participant or beneficiary and is entitled 

under applicable provisions of a QDRO 

to receive the benefit; 

(2) A person that is identified by the 

plan in a submission to PBGC by the 

plan as being entitled under applicable 

plan provisions (including elections, 

designations, and waivers consistent 

with such provisions) to receive the 

benefit; or 

(3) If no such person is so entitled, a 

survivor of the participant or beneficiary 

who is the participant’s or beneficiary’s 

living— 

(i) Spouse, or if none, 

(ii) Child, or if none, 

(iii) Parent, or if none, 

(iv) Sibling. 

Subpart C plan or plan means a plan 

to which this subpart C applies, as 

described in § 4050.301. 

Transferring plan means a subpart C 

plan for which the plan administrator 

elects transferring plan status in 

accordance with § 4050.303. 

§ 4050.303 Options and duties of plan 

administrator. 

(a) Options. The plan administrator of 

a subpart C plan that is closing out upon 

plan termination may (but need not), by 

filing under § 4050.305, elect that the 

subpart C plan— 

(1) Will be a ‘‘transferring plan,’’ that 

is, will pay a benefit transfer amount to 

PBGC for each distributee who is 

missing upon close-out of the subpart C 

plan and will be bound by the 

provisions of this subpart C to the extent 

that they apply to transferring plans, or 

(2) Will be a ‘‘notifying plan,’’ that is, 

will notify PBGC of the disposition of 

the benefits of each distributee 

identified in the filing who is missing 

upon close-out of the plan and will, 

with respect to those distributees, be 

bound by the provisions of this subpart 

C to the extent that they apply to 

notifying plans. 

(b) Diligent search—(1) In general. 

Except as provided in paragraph (b)(2) 

of this section, for each distributee 

whose location the plan administrator 

does not know with reasonable certainty 

upon close-out of a subpart C plan, the 

plan administrator must have conducted 

a diligent search as described in 

§ 4050.304. 

(2) Notifying plans. For a notifying 

plan, the requirement of paragraph 

(b)(1) of this section applies only to 

distributees identified in the filing with 

PBGC. 

(c) Filing with PBGC—(1) In general. 

Except as provided in paragraph (c)(2) 

of this section, for each distributee who 

is missing upon close-out of a subpart 

C plan, the plan administrator must file 

with PBGC as described in § 4050.305. 

(2) Notifying plans. For a notifying 

plan, the requirement of paragraph (c)(1) 

of this section applies only to 

distributees identified in the filing with 

PBGC. 

(d) Benefit transfer amount. The 

benefit transfer amount for a missing 

distributee is the amount determined by 

the plan administrator as of the benefit 

determination date using whichever one 

of the following three methods applies: 

(1) De minimis. If the single sum 

actuarial equivalent of the distributee’s 

benefits (including any payments 

missed in the past) determined using 

plan lump sum assumptions is de 

minimis, then the missing distributee’s 

benefit transfer amount is equal to that 

single sum. 

(2) Non-de minimis; single sum 

payment cannot be elected. If the single 

sum actuarial equivalent of the 

distributee’s benefits (including any 

payments missed in the past) 

determined using plan lump sum 

assumptions is not de minimis, and a 

single sum payment cannot be elected, 

then the missing distributee’s benefit 

transfer amount is the present value of 

the distributee’s accrued benefit 

determined using PBGC missing 

participants assumptions, plus 

(i) For a missing distributee not in pay 

status whose normal retirement date (or 

accrual cessation date if later) precedes 

the benefit determination date, the 

aggregate value of payments of the 

straight life annuity that would have 

been payable beginning on the normal 

retirement date (or accrual cessation 

date if later), accumulated at the missing 

participants interest rate from the date 

each payment would have been made to 

the benefit determination date, 

assuming that the distributee survived 

to the benefit determination date, as 

determined by the plan administrator; 

or 

(ii) For a missing distributee in pay 

status, the aggregate value of payments 

of the pay status annuity due but not 

made, accumulated at the missing 

participants interest rate from each 

payment due date to the benefit 

determination date, assuming that the 

distributee survived to the benefit 

determination date. 

(3) Non-de minimis; single sum 

payment can be elected. If the single 

sum actuarial equivalent of the 

distributee’s benefits (including any 

payments missed in the past) 

determined using plan lump sum 

assumptions is not de minimis, and a 

single sum payment can be elected, then 

the missing distributee’s benefit transfer 

amount is the greater of the amounts 

determined using the methodology in 

paragraph (d)(1) or (d)(2) of this section. 

§ 4050.304 Diligent search. 

(a) Search requirement. For each 

distributee of a subpart C plan who is 

described in § 4050.303(b), the plan 

administrator must, within the time 

frame described in paragraph (d) of this 

section, have diligently searched for 

each distributee of the plan whose 

location the plan administrator does not 

know with reasonable certainty upon 

close out, using one of the following two 

methods: 

(1) For any distributee, regardless of 

the size of the distributee’s benefit, the 

commercial locator service method 

described in paragraph (b) of this 

section; or 

(2) For a distributee whose normal 

retirement benefit is not more than $50 

per month, the records search method 

described in paragraph (c) of this 

section. 

(b) Commercial locator service 

method—(1) In general. Using the 

commercial locator service method 

means paying a commercial locator 

service to search for information to 

locate a distributee. 

(2) Meaning of ‘‘commercial locator 

service.’’ For purposes of this section, a 

commercial locator service is a business 


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Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Rules and Regulations 60827 

that holds itself out as a finder of lost 

persons for compensation using 

information from a database maintained 

by a consumer reporting agency (as 

defined in 15 U.S.C. 1681a(f)). 

(c) Records search method—(1) In 

general. Using the records search 

method means searching for information 

to locate a distributee by doing all of the 

following to the extent reasonably 

feasible and affordable: 

(i) Searching the records of the plan 

for information to locate the distributee. 

(ii) Searching the records of the plan’s 

contributing sponsor that is the most 

recent employer of the distributee for 

information to locate the distributee. 

(iii) Searching the records of each 

retirement or welfare plan of the plan’s 

contributing sponsor in which the 

distributee was a participant for 

information to locate the distributee. 

(iv) Contacting each beneficiary of the 

distributee identified from the records 

referred to in paragraphs (c)(1)(i), (ii), 

and (iii) of this section for information 

to locate the distributee. 

(v) Using an internet search method 

for which no fee is charged, such as a 

search engine, a network database, a 

public record database (such as those for 

licenses, mortgages, and real estate 

taxes) or a ‘‘social media’’ website. 

(2) Limits on method. For purposes of 

this section— 

(i) Searching is not feasible to the 

extent that, as a practical matter, it is 

thwarted by legal or practical lack of 

access to records, and 

(ii) Searching is not affordable to the 

extent that the cost of searching 

(including the value of labor) is more 

than a reasonable fraction of the benefit 

of the distributee being searched for. In 

no event would searching need to be 

pursued beyond the point where the 

cost equals the value of the benefit. 

(d) Time frame. A search for a 

distributee under this section must have 

been made within nine months before a 

filing is made under § 4050.305 

identifying the distributee as a missing 

distributee. 

§ 4050.305 Filing with PBGC. 

(a) What to file. The plan 

administrator of a subpart C plan must 

file with PBGC the information 

specified in the missing participants 

forms and instructions, and if the plan 

is a transferring plan, payment of— 

(1) The benefit transfer amount for the 

missing distributee; 

(2) If the benefit transfer amount is 

paid more than 90 days after the benefit 

determination date, interest on the 

benefit transfer amount computed at the 

missing participants interest rate for the 

period beginning on the 90th day after 

the benefit determination date and 

ending on the date the benefit transfer 

amount is paid to PBGC; and 

(3) Any fee provided for in the 

missing participants forms and 

instructions. 

(b) When to file. The plan 

administrator must file the information 

and payments referred to in paragraph 

(a) of this section in accordance with the 

missing participants forms and 

instructions. 

(c) Place, method and date of filing; 

time periods. 

(1) For rules about where to file, see 

§ 4000.4 of this chapter. 

(2) For rules about permissible 

methods of filing with PBGC under this 

subpart, see subpart A of part 4000 of 

this chapter. 

(3) For rules about the date that a 

submission under this subpart was filed 

with PBGC, see subpart C of part 4000 

of this chapter. 

(4) For rules about any time period for 

filing under this subpart, see subpart D 

of part 4000 of this chapter. 

(d) Supplemental information. Within 

30 days after a written request by PBGC 

(or such other time as may be specified 

in the request), the plan administrator of 

a subpart C plan required to file under 

paragraph (a) of this section must file 

with PBGC supplemental information 

for any proper purpose under the 

missing participants program. 

(e) Reliance. As administrator of the 

missing participants program, PBGC 

will rely on determinations made and 

information reported by plan 

administrators in connection with the 

program. 

§ 4050.306 Missing participant benefits. 

(a) In general—(1) Notifying plan. If a 

notifying plan files with PBGC 

information about a disposition of 

benefits made by the subpart C plan for 

a missing distributee, PBGC will 

provide information about the 

disposition of benefits to the distributee 

or another claimant that may be entitled 

to the benefits. 

(2) Transferring plan. If a transferring 

plan pays PBGC a benefit transfer 

amount for a missing distributee, PBGC 

will pay benefits with respect to the 

missing distributee in accordance with 

this section, subject to the provisions of 

a QDRO. 

(b) Benefits for missing distributees 

who are participants. Paragraphs (c), (d), 

(e), and (k) of this section describe the 

benefits that PBGC will pay to a non-pay 

status missing participant of a subpart C 

plan who claims a benefit under the 

missing participants program. 

(c) De minimis benefit. If the benefit 

transfer amount of a participant 

described in paragraph (b) of this 

section is de minimis, PBGC will pay 

the participant a lump sum equal to the 

accumulated single sum. 

(d) Non-de minimis benefit of 

unmarried participant. If the benefit 

transfer amount of an unmarried 

participant described in paragraph (b) of 

this section is not de minimis, PBGC 

will pay the participant either the 

annuity described in paragraph (d)(1) of 

this section, beginning not before age 

55, and (if applicable) the make-up 

amount described in paragraph (d)(2) of 

this section; or, if the participant could 

have elected a lump sum under the 

subpart C plan, and the participant so 

elects under the missing participants 

program, the lump sum described in 

paragraph (d)(3) of this section. 

(1) Annuity. The annuity described in 

this paragraph (d)(1) is either— 

(i) Straight life annuity. A straight life 

annuity in the amount that the subpart 

C plan would have paid the participant, 

starting at the date that PBGC payments 

start (or, if earlier, the later of the 

participant’s normal retirement date or 

accrual cessation date), as reported to 

PBGC by the subpart C plan (including 

any early retirement subsidies), or 

through linear interpolation for 

participants who start payments 

between integral ages; or 

(ii) Other form of annuity. At the 

participant’s election, any form of 

annuity available to the participant 

under § 4022.8 of this chapter, in an 

amount that is actuarially equivalent to 

the straight life annuity in paragraph 

(d)(1)(i) of this section as of the date that 

PBGC payments start (or, if earlier, the 

later of the participant’s normal 

retirement date or accrual cessation 

date), determined using the actuarial 

assumptions in § 4022.8(c)(7) of this 

chapter. 

(2) Make-up amount. If PBGC begins 

to pay the annuity under paragraph 

(d)(1) of this section after the normal 

retirement date (or accrual cessation 

date if later), the make-up amount 

described in this paragraph (d)(2) is a 

lump sum equal to the aggregate value 

of payments of the annuity that would 

have been payable to the participant (in 

the elected form) beginning on the 

normal retirement date (or accrual 

cessation date if later), accumulated at 

the missing participants interest rate 

from the date each payment would have 

been made to the date when PBGC 

begins to pay the annuity. 

(3) Lump sum. The lump sum 

described in this paragraph (d)(3) is 

equal to the participant’s accumulated 

single sum. 

(e) Non-de minimis benefit of married 

participant. If the benefit transfer 


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60828 Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Rules and Regulations 

amount of a married participant 

described in paragraph (b) of this 

section is not de minimis, PBGC will 

pay the participant either the annuity 

described in paragraph (e)(1) of this 

section, beginning not before age 55, 

and (if applicable) the make-up amount 

described in paragraph (e)(2) of this 

section; or, if the participant could have 

elected a lump sum under the subpart 

C plan, and the participant so elects 

under the missing participants program 

with the consent of the participant’s 

spouse, the lump sum described in 

paragraph (e)(3) of this section. 

(1) Annuity. The annuity described in 

this paragraph (e)(1) is either— 

(i) Joint and survivor annuity. A joint 

and 50 percent survivor annuity in an 

amount that is actuarially equivalent to 

the straight life annuity under paragraph 

(d)(1)(i) of this section as of the date that 

PBGC payments start (or, if earlier, the 

later of the participant’s normal 

retirement date or accrual cessation 

date), determined using the actuarial 

assumptions in § 4022.8(c)(7) of this 

chapter; or 

(ii) Other form of annuity. At the 

participant’s election, with the consent 

of the participant’s spouse, any form of 

annuity available to the participant 

under § 4022.8 of this chapter, in an 

amount that is actuarially equivalent to 

the joint and 50 percent survivor 

annuity under paragraph (e)(1)(i) of this 

section as of the date that PBGC 

payments start (or, if earlier, the later of 

the participant’s normal retirement date 

or accrual cessation date), determined 

using the actuarial assumptions in 

§ 4022.8(c)(7) of this chapter. 

(2) Make-up amount. If PBGC begins 

to pay the annuity under paragraph 

(e)(1) of this section after the normal 

retirement date (or accrual cessation 

date if later), the make-up amount 

described in this paragraph (e)(2) is a 

lump sum equal to the aggregate value 

of payments of the annuity that would 

have been payable to the participant 

beginning on the normal retirement date 

(or accrual cessation date if later), 

accumulated at the missing participants 

interest rate from the date each payment 

would have been made to the date when 

PBGC begins to pay the annuity. 

(3) Lump sum. The lump sum 

described in this paragraph (e)(3) is 

equal to the participant’s accumulated 

single sum. 

(f) Benefits with respect to deceased 

missing distributees who were 

participants. Paragraphs (g), (h), (i), (j), 

and (k) of this section describe the 

benefits that PBGC will pay with respect 

to a non-pay status missing participant 

of a subpart C plan who dies without 

receiving a benefit under the missing 

participants program. 

(g) De minimis benefit. If the benefit 

transfer amount of a participant 

described in paragraph (f) of this section 

is de minimis, PBGC will pay to the 

qualified survivor(s) of the participant a 

lump sum equal to the participant’s 

accumulated single sum. 

(h) Non-de minimis benefit; 

unmarried participant. In the case of an 

unmarried participant described in 

paragraph (f) of this section whose 

benefit transfer amount is not de 

minimis,— 

(1) Death before normal retirement 

date. If the participant dies before the 

normal retirement date (or accrual 

cessation date if later), PBGC will pay 

no benefits with respect to the 

participant; and 

(2) Death after normal retirement 

date. If the participant dies on or after 

the normal retirement date (or accrual 

cessation date if later), PBGC will pay to 

the participant’s qualified survivor(s) an 

amount equal to the aggregate value of 

payments of the straight life annuity 

described in paragraph (d)(1)(i) of this 

section that would have been payable to 

the participant from the normal 

retirement date (or accrual cessation 

date if later) to the participant’s date of 

death, accumulated at the missing 

participants interest rate from the date 

each payment would have been made to 

the date when PBGC pays the qualified 

survivor(s). 

(i) Non-de minimis benefit; married 

participant with living spouse. In the 

case of a married participant described 

in paragraph (f) of this section whose 

benefit transfer amount is not de 

minimis and whose spouse survives the 

participant and claims a benefit under 

the missing participants program, PBGC 

will pay the spouse, beginning not 

before the participant would have 

reached age 55, the annuity (if any) 

described in paragraph (i)(1) of this 

section and the make-up amounts (if 

applicable) described in paragraph (i)(2) 

of this section, except that PBGC will 

pay the spouse, as a lump sum, the 

small benefit described in paragraph 

(i)(3) of this section. 

(1) Annuity. The annuity described in 

this paragraph (i)(1) is the survivor 

portion of a joint and 50 percent 

survivor annuity that is actuarially 

equivalent as of the assumed starting 

date (determined using the actuarial 

assumptions in § 4022.8(c)(7) of this 

chapter) to the straight life annuity in 

the amount that the subpart C plan 

would have paid the participant with an 

assumed starting date of— 

(i) The date when the participant 

would have reached age 55, if the 

participant died before that date, or 

(ii) The participant’s date of death, if 

the participant died between age 55 and 

the normal retirement date (or accrual 

cessation date if later), or 

(iii) The normal retirement date (or 

accrual cessation date if later), if the 

participant died after that date. 

(2) Make-up amounts. The make-up 

amounts described in this paragraph 

(i)(2) are the amounts described in 

paragraphs (i)(2)(i) and (ii) of this 

section. 

(i) Payments from participant’s death 

or 55th birthday to commencement of 

survivor annuity. The make-up amount 

described in this paragraph (i)(2)(i) is a 

lump sum equal to the aggregate value 

of payments of the survivor portion of 

the joint and 50 percent survivor 

annuity described in paragraph (i)(1) of 

this section that would have been 

payable to the spouse beginning on the 

later of the participant’s date of death or 

the date when the participant would 

have reached age 55, accumulated at the 

missing participants interest rate from 

the date each payment would have been 

made to the date when PBGC pays the 

spouse. 

(ii) Payments from normal retirement 

date to participant’s death. The makeup amount described in this paragraph 

(i)(2)(ii) is a lump sum equal to the 

aggregate value of payments (if any) of 

the joint portion of the joint and 50 

percent survivor annuity described in 

paragraph (i)(1) of this section that 

would have been payable to the 

participant from the normal retirement 

date (or accrual cessation date if later) 

to the participant’s date of death 

thereafter, accumulated at the missing 

participants interest rate from the date 

each payment would have been made to 

the date when PBGC pays the spouse. 

(3) Small benefit. If the sum of the 

actuarial present value of the annuity 

described in paragraph (i)(1) of this 

section plus the make-up amounts 

described in paragraph (i)(2) of this 

section is de minimis, then the lump 

sum that PBGC will pay the spouse 

under this paragraph (i)(3) is an amount 

equal to that sum. For this purpose, the 

actuarial present value of the annuity is 

determined using the actuarial 

assumptions in § 4022.8(c)(7) of this 

chapter as of the date when PBGC pays 

the spouse. 

(j) Non-de minimis benefit; married 

participant with deceased spouse. In the 

case of a married participant described 

in paragraph (f) of this section whose 

benefit transfer amount is not de 

minimis and whose spouse survives the 

participant but dies without receiving a 


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Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Rules and Regulations 60829 

benefit under the missing participants 

program, PBGC will pay to the qualified 

survivor(s) of the participant’s spouse 

the make-up amount described in 

paragraph (j)(1) of this section and to the 

qualified survivor(s) of the participant 

the make-up amount described in 

paragraph (j)(2) of this section. 

(1) Payments from participant’s death 

or 55th birthday to spouse’s death. The 

make-up amount described in this 

paragraph (j)(1) is a lump sum equal to 

the aggregate value of payments of the 

survivor portion of the joint and 50 

percent survivor annuity described in 

paragraph (i)(1) of this section that 

would have been payable to the spouse 

from the later of the participant’s date 

of death or the date when the 

participant would have reached age 55 

to the spouse’s date of death, 

accumulated at the missing participants 

interest rate from the date each payment 

would have been made to the date when 

PBGC pays the spouse’s qualified 

survivor(s). 

(2) Payments from normal retirement 

date to participant’s death. The makeup amount described in this paragraph 

(j)(2) is a lump sum equal to the 

aggregate value of payments of the joint 

portion of the joint and 50 percent 

survivor annuity described in paragraph 

(i)(1) of this section that would have 

been payable to the participant from the 

normal retirement date (or accrual 

cessation date if later) to the 

participant’s date of death thereafter, 

accumulated at the missing participants 

interest rate from the date each payment 

would have been made to the date when 

PBGC pays the participant’s qualified 

survivor(s). 

(k) Benefits under contributory plans. 

If a subpart C plan reports to PBGC that 

a portion of a missing participant’s 

benefit transfer amount represents 

accumulated contributions as described 

in section 204(c)(2)(C) of ERISA and 

section 411(c)(2)(C) of the Code, PBGC 

will pay with respect to the missing 

participant, at least the amount of 

accumulated contributions as reported 

by the subpart C plan, accumulated at 

the missing participants interest rate 

from the benefit determination date to 

the date when PBGC makes payment. 

(l) Date for determining marital status. 

For purposes of this section, whether a 

participant is married, and if so the 

identity of the spouse, is determined as 

of the earlier of— 

(1) The date the participant receives 

or begins to receive a benefit, or 

(2) The date the participant dies. 

§ 4050.307 PBGC discretion. 

PBGC may in appropriate 

circumstances extend deadlines, excuse 

noncompliance, and grant waivers with 

regard to any provision of this subpart 

to promote the purposes of the missing 

participants program and title IV of 

ERISA. Like circumstances will be 

treated in like manner under this 

section. 

Subpart D—Multiemployer Plans 

Covered by Title IV 

§ 4050.401 Purpose and scope. 

(a) In general. This subpart describes 

PBGC’s missing participants program for 

multiemployer defined benefit 

retirement plans covered by title IV of 

ERISA. The missing participants 

program is a program to hold retirement 

benefits for missing participants and 

beneficiaries in retirement plans that are 

closing out and to help them find and 

receive the benefits being held for them. 

For a plan to which this subpart applies, 

this subpart describes what the plan 

must do upon plan termination if it has 

missing participants or beneficiaries 

who are entitled to distributions. This 

subpart applies to a plan only if it is a 

multiemployer defined benefit plan 

that— 

(1) Is described in section 4021(a) of 

ERISA and not in any paragraph of 

section 4021(b) of ERISA, and 

(2) Completes the process of closing 

out under subpart D of PBGC’s 

regulation on Termination of 

Multiemployer Plans (29 CFR part 

4041A). 

(b) Plans that terminate but do not 

close out. This subpart does not apply 

to plans that terminate but do not close 

out. 

(c) Individual account plans. This 

subpart does not apply to an individual 

account plan under section 3(34) of 

ERISA, even if it is described in the 

same plan document as a plan to which 

this subpart applies. This subpart also 

does not apply to a plan to the extent 

that it is treated as an individual 

account plan under section 3(35)(B) of 

ERISA. For example, this subpart does 

not apply to employee contributions (or 

interest or earnings thereon) held as an 

individual account. (Subpart B deals 

with individual account plans.) 

§ 4050.402 Definitions. 

The following terms are defined in 

§ 4001.2 of this chapter: Annuity, Code, 

ERISA, insurer, PBGC, person, and plan 

sponsor. In addition, for purposes of 

this subpart: 

Accrual cessation date for a 

participant under a subpart D plan 

means the date the participant stopped 

accruing benefits under the terms of the 

plan. 

Accumulated single sum means, with 

respect to a missing distributee, the 

distributee’s benefit transfer amount 

accumulated at the missing participants 

interest rate from the benefit 

determination date to the date when 

PBGC makes or commences payment to 

or with respect to the distributee. 

Benefit determination date with 

respect to a subpart D plan means the 

single date selected by the plan sponsor 

for valuing benefits under § 4050.103(d); 

this date must be during the period 

beginning on the first day a distribution 

is made pursuant to close-out of the 

plan to a distributee who is not a 

missing distributee and ending on the 

last day such a distribution is made. 

Benefit transfer amount for a missing 

distributee of a subpart D plan means 

the amount determined by the plan 

sponsor under § 4050.403(d) in the 

close-out of the plan. 

Close-out or close out with respect to 

a subpart D plan means the process of 

the final distribution or transfer of assets 

in satisfaction of plan benefits. 

De minimis means, with respect to the 

value of a benefit (or other amount), that 

the value does not exceed the amount 

specified under section 203(e)(1) of 

ERISA and section 411(a)(11)(A) of the 

Code (without regard to plan 

provisions). 

Distributee means, with respect to a 

subpart D plan, a participant or 

beneficiary entitled to a distribution 

under the subpart D plan pursuant to 

the close-out of the subpart D plan. 

Missing, with respect to a distributee 

under a subpart D plan, means that any 

one or more of the following three 

conditions exists upon close-out of the 

plan. 

(1) The plan sponsor does not know 

with reasonable certainty the location of 

the distributee. 

(2) Under the terms of the plan, the 

distributee’s benefit is to be paid in a 

lump sum without the distributee’s 

consent, and the distributee has not 

responded to a notice about the 

distribution of the lump sum. 

(3) Under the terms of the plan and 

any election made by the distributee, 

the distributee’s benefit is to be paid in 

a lump sum, but the distributee does not 

accept the lump sum. For this purpose, 

a lump sum paid by check is not 

accepted if the check remains uncashed 

after— 

(i) A ‘‘cash-by’’ date prescribed (on 

the check or in an accompanying notice) 

that is at least 45 days after the issuance 

of the check, or 

(ii) If no such ‘‘cash-by’’ date is so 

prescribed, the check’s stale date. 

Missing participants forms and 

instructions means the forms and 

instructions provided by PBGC for use 


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60830 Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Rules and Regulations 

in connection with the missing 

participants program. 

Missing participants interest rate 

means, for each month, the applicable 

federal mid-term rate (as determined by 

the Secretary of the Treasury pursuant 

to section 1274(d)(1)(C)(ii) of the Code) 

for that month, compounded monthly. 

Normal retirement date for a 

participant under a subpart D plan 

means the normal retirement date of the 

participant under the terms of the plan. 

Pay-status or pay status means one of 

the following (according to context): 

(1) With respect to a benefit, that 

payment of the benefit has actually 

started before the benefit determination 

date; or 

(2) With respect to a distributee, that 

payment of the distributee’s benefit has 

actually started before the benefit 

determination date. 

PBGC missing participants 

assumptions means the actuarial 

assumptions prescribed in §§ 4044.51 

through 4044.57 of this chapter with the 

following modifications: 

(1) The present value is determined as 

of the benefit determination date instead 

of the plan termination date. 

(2) The mortality assumption is a 

fixed blend of 50 percent of the healthy 

male mortality rates in § 4044.53(c)(1) of 

this chapter and 50 percent of the 

healthy female mortality rates in 

§ 4044.53(c)(2) of this chapter. 

(3) No adjustment is made for loading 

expenses under § 4044.52(d) of this 

chapter. 

(4) The interest assumption used is 

the assumption applicable to valuations 

occurring in January of the calendar 

year in which the benefit determination 

date occurs. 

(5) The assumed payment form of a 

benefit not in pay status is a straight life 

annuity. 

(6) Pre-retirement death benefits are 

disregarded. 

(7) Notwithstanding the expected 

retirement age (XRA) assumptions in 

§§ 4044.55 through 4044.57 of this 

chapter,— 

(i) In the case of a participant who is 

not in pay status and whose normal 

retirement date is on or after the benefit 

determination date, benefits are 

assumed to commence at the XRA, 

determined using the high retirement 

rate category under Table II–C of 

Appendix D to part 4044 of this chapter; 

(ii) In the case of a participant who is 

not in pay status and whose normal 

retirement date is before the benefit 

determination date, benefits are 

assumed to commence on the 

participant’s normal retirement date (or 

accrual cessation date if later); 

(iii) In the case of a participant who 

is in pay status, benefits are assumed to 

commence on the date on which 

benefits actually commenced; and 

(iv) In the case of a beneficiary, 

benefits are assumed to commence on 

the benefit determination date or, if 

later, the earliest date the beneficiary 

can begin to receive benefits. 

Plan lump sum assumptions means, 

with respect to a subpart D plan, the 

following: 

(1) If the plan specifies actuarial 

assumptions and methods to be used to 

calculate a lump sum distribution, such 

actuarial assumptions and methods, or 

(2) Otherwise, the actuarial 

assumptions specified under section 

205(g)(3) of ERISA and section 417(e)(3) 

of the Code, determined as of the benefit 

determination date, including use of the 

missing participants interest rate to 

calculate the present value as of the 

benefit determination date of a payment 

or payments missed in the past. 

QDRO means a qualified domestic 

relations order as defined in section 

206(d)(3) of ERISA and section 414(p) of 

the Code. 

Qualified survivor of a participant or 

beneficiary under a subpart D plan 

means, for any benefit with respect to 

the participant or beneficiary,— 

(1) A person who survives the 

participant or beneficiary and is entitled 

under applicable provisions of a QDRO 

to receive the benefit; 

(2) A person that is identified by the 

plan in a submission to PBGC by the 

plan as being entitled under applicable 

plan provisions (including elections, 

designations, and waivers consistent 

with such provisions) to receive the 

benefit; or 

(3) If no such person is so entitled, a 

survivor of the participant or beneficiary 

who is the participant’s or beneficiary’s 

living— 

(i) Spouse, or if none, 

(ii) Child, or if none, 

(iii) Parent, or if none, 

(iv) Sibling. 

Subpart D plan or plan means a plan 

to which this subpart D applies, as 

described in § 4050.401. 

§ 4050.403 Duties of plan sponsor. 

(a) Providing for benefits. For each 

distributee who is missing upon closeout of a subpart D plan, the plan 

sponsor must provide for the 

distributee’s plan benefits either— 

(1) By purchase of an annuity contract 

from an insurer; or 

(2) By— 

(i) Determining the distributee’s 

benefit transfer amount under paragraph 

(e) of this section, and 

(ii) Transferring to PBGC as described 

in this subpart D an amount equal to the 

distributee’s benefit transfer amount. 

(b) Diligent search. For each 

distributee whose location the plan 

sponsor does not know with reasonable 

certainty upon close-out of a subpart D 

plan, the plan sponsor must have 

conducted a diligent search as described 

in § 4050.404. 

(c) Filing with PBGC. For each 

distributee who is missing upon closeout of a subpart D plan, the plan 

sponsor must file with PBGC as 

described in § 4050.405. 

(d) Benefit transfer amount. The 

benefit transfer amount for a missing 

distributee is the amount determined by 

the plan sponsor as of the benefit 

determination date using whichever one 

of the following three methods applies: 

(1) De minimis. If the single sum 

actuarial equivalent of the distributee’s 

benefits (including any payments 

missed in the past) determined using 

plan lump sum assumptions is de 

minimis, then the missing distributee’s 

benefit transfer amount is equal to that 

single sum. 

(2) Non-de minimis; single sum 

payment cannot be elected. If the single 

sum actuarial equivalent of the 

distributee’s benefits (including any 

payments missed in the past) 

determined using plan lump sum 

assumptions is not de minimis, and a 

single sum payment cannot be elected, 

then the missing distributee’s benefit 

transfer amount is the present value of 

the distributee’s accrued benefit 

determined using PBGC missing 

participants assumptions, plus 

(i) For a missing distributee not in pay 

status whose normal retirement date (or 

accrual cessation date if later) precedes 

the benefit determination date, the 

aggregate value of payments of the 

straight life annuity that would have 

been payable beginning on the normal 

retirement date (or accrual cessation 

date if later), accumulated at the missing 

participants interest rate from the date 

each payment would have been made to 

the benefit determination date, 

assuming that the distributee survived 

to the benefit determination date, as 

determined by the plan sponsor; or 

(ii) For a missing distributee in pay 

status, the aggregate value of payments 

of the pay status annuity due but not 

made, accumulated at the missing 

participants interest rate from each 

payment due date to the benefit 

determination date, assuming that the 

distributee survived to the benefit 

determination date. 

(3) Non-de minimis; single sum 

payment can be elected. If the single 

sum actuarial equivalent of the 

distributee’s benefits (including any 

payments missed in the past) 

determined using plan lump sum 


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Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Rules and Regulations 60831 

assumptions is not de minimis, and a 

single sum payment can be elected, then 

the missing distributee’s benefit transfer 

amount is the greater of the amounts 

determined using the methodology in 

paragraph (d)(1) or (d)(2) of this section. 

§ 4050.404 Diligent search. 

(a) Search requirement. The plan 

sponsor of a subpart D plan must, 

within the time frame described in 

paragraph (d) of this section, have 

diligently searched for each distributee 

of the plan whose location the plan 

sponsor does not know with reasonable 

certainty upon close-out, using one of 

the following two methods: 

(1) For any distributee, regardless of 

the size of the distributee’s benefit, the 

commercial locator service method 

described in paragraph (b) of this 

section; or 

(2) For a distributee whose normal 

retirement benefit is not more than $50 

per month, the records search method 

described in paragraph (c) of this 

section. 

(b) Commercial locator service 

method—(1) In general. Using the 

commercial locator service method 

means paying a commercial locator 

service to search for information to 

locate a distributee. 

(2) Meaning of ‘‘commercial locator 

service.’’ For purposes of this section, a 

commercial locator service is a business 

that holds itself out as a finder of lost 

persons for compensation using 

information from a database maintained 

by a consumer reporting agency (as 

defined in 15 U.S.C. 1681a(f)). 

(c) Records search method—(1) In 

general. Using the records search 

method means searching for information 

to locate a distributee by doing all of the 

following to the extent reasonably 

feasible and affordable: 

(i) Searching the records of the plan 

for information to locate the distributee. 

(ii) Searching the records of the 

contributing sponsor that is the most 

recent employer of the distributee for 

information to locate the distributee. 

(iii) Searching the records of each 

retirement or welfare plan of the 

contributing sponsor in which the 

distributee was a participant for 

information to locate the distributee. 

(iv) Contacting each beneficiary of the 

distributee identified from the records 

referred to in paragraphs (c)(1)(i), (ii), 

and (iii) of this section for information 

to locate the distributee. 

(v) Using an internet search method 

for which no fee is charged, such as a 

search engine, a network database, a 

public record database (such as those for 

licenses, mortgages, and real estate 

taxes) or a ‘‘social media’’ website. 

(2) Limits on method. For purposes of 

this section,— 

(i) Searching is not feasible to the 

extent that, as a practical matter, it is 

thwarted by legal or practical lack of 

access to records, and 

(ii) Searching is not affordable to the 

extent that the cost of searching 

(including the value of labor) is more 

than a reasonable fraction of the benefit 

of the distributee being searched for. In 

no event would searching need to be 

pursued beyond the point where the 

cost equals the value of the benefit. 

(d) Time frame. A search for a 

distributee under this section must have 

been made within nine months before a 

filing is made under § 4050.405 

identifying the distributee as a missing 

distributee. 

§ 4050.405 Filing with PBGC. 

(a) What to file. The plan sponsor of 

a subpart D plan must file with PBGC 

the information specified in the missing 

participants forms and instructions and, 

for a missing distributee referred to in 

§ 4050.403(a)(2), payment of— 

(1) The benefit transfer amount for the 

missing distributee; 

(2) If the benefit transfer amount is 

paid more than 90 days after the benefit 

determination date, interest on the 

benefit transfer amount computed at the 

missing participants interest rate for the 

period beginning on the 90th day after 

the benefit determination date and 

ending on the date the benefit transfer 

amount is paid to PBGC; and 

(3) Any fee provided for in the 

missing participants forms and 

instructions. 

(b) When to file. The plan sponsor 

must file the information and payments 

referred to in paragraph (a) of this 

section in accordance with the missing 

participants forms and instructions. 

Payment of a benefit transfer amount 

will, if considered timely made for 

purposes of this paragraph (b), be 

considered timely made for purposes of 

part 4041A of this chapter. 

(c) Place, method and date of filing; 

time periods. (1) For rules about where 

to file, see § 4000.4 of this chapter. 

(2) For rules about permissible 

methods of filing with PBGC under this 

subpart, see subpart A of part 4000 of 

this chapter. 

(3) For rules about the date that a 

submission under this subpart was filed 

with PBGC, see subpart C of part 4000 

of this chapter. 

(4) For rules about any time period for 

filing under this subpart, see subpart D 

of part 4000 of this chapter. 

(d) Supplemental information. Within 

30 days after a written request by PBGC 

(or such other time as may be specified 

in the request), the plan sponsor of a 

subpart D plan required to file under 

paragraph (a) of this section must file 

with PBGC supplemental information 

for any proper purpose under the 

missing participants program. 

(e) Reliance. As administrator of the 

missing participants program, PBGC 

will rely on determinations made and 

information reported by plan sponsors 

in connection with the program. This 

reliance does not affect PBGC’s 

authority as administrator of the title IV 

insurance program to audit or make 

inquiries of subpart D plans, including 

about the amount to which a missing 

distributee may be entitled. 

§ 4050.406 Missing participant benefits. 

(a) In general—(1) Benefit transfer 

amount not paid. If a subpart D plan 

files with PBGC information about an 

annuity contract purchased by the 

subpart D plan from an insurer for a 

missing distributee, PBGC will provide 

information about the annuity contract 

to the distributee or another claimant 

that may be entitled to payment 

pursuant to the contract. 

(2) Benefit transfer amount paid. If a 

subpart D plan pays PBGC a benefit 

transfer amount for a missing 

distributee, PBGC will pay benefits with 

respect to the missing distributee in 

accordance with this section, subject to 

the provisions of a QDRO. 

(b) Benefits for missing distributees 

who are participants. Paragraphs (c), (d), 

(e), and (k) of this section describe the 

benefits that PBGC will pay to a non-pay 

status missing participant of a subpart D 

plan who claims a benefit under the 

missing participants program. 

(c) De minimis benefit. If the benefit 

transfer amount of a participant 

described in paragraph (b) of this 

section is de minimis, PBGC will pay 

the participant a lump sum equal to the 

accumulated single sum. 

(d) Non-de minimis benefit of 

unmarried participant. If the benefit 

transfer amount of an unmarried 

participant described in paragraph (b) of 

this section is not de minimis, PBGC 

will pay the participant either the 

annuity described in paragraph (d)(1) of 

this section, beginning not before age 

55, and (if applicable) the make-up 

amount described in paragraph (d)(2) of 

this section; or, if the participant could 

have elected a lump sum under the 

subpart D plan, and the participant so 

elects under the missing participants 

program, the lump sum described in 

paragraph (d)(3) of this section. 

(1) Annuity. The annuity described in 

this paragraph (d)(1) is either— 

(i) Straight life annuity. A straight life 

annuity in the amount that the subpart 


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60832 Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Rules and Regulations 

D plan would have paid the participant, 

starting at the date that PBGC payments 

start (or, if earlier, the later of the 

participant’s normal retirement date or 

accrual cessation date), as reported to 

PBGC by the subpart D plan (including 

any early retirement subsidies), or 

through linear interpolation for 

participants who start payments 

between integral ages; or 

(ii) Other form of annuity. At the 

participant’s election, any form of 

annuity available to the participant 

under § 4022.8 of this chapter, in an 

amount that is actuarially equivalent to 

the straight life annuity in paragraph 

(d)(1)(i) of this section as of the date that 

PBGC payments start (or, if earlier, the 

later of the participant’s normal 

retirement date or accrual cessation 

date), determined using the actuarial 

assumptions in § 4022.8(c)(7) of this 

chapter. 

(2) Make-up amount. If PBGC begins 

to pay the annuity under paragraph 

(d)(1) of this section after the normal 

retirement date (or accrual cessation 

date if later), the make-up amount 

described in this paragraph (d)(2) is a 

lump sum equal to the aggregate value 

of payments of the annuity that would 

have been payable to the participant (in 

the elected form) beginning on the 

normal retirement date (or accrual 

cessation date if later), accumulated at 

the missing participants interest rate 

from the date each payment would have 

been made to the date when PBGC 

begins to pay the annuity. 

(3) Lump sum. The lump sum 

described in this paragraph (d)(3) is 

equal to the participant’s accumulated 

single sum. 

(e) Non-de minimis benefit of married 

participant. If the benefit transfer 

amount of a married participant 

described in paragraph (b) of this 

section is not de minimis, PBGC will 

pay the participant either the annuity 

described in paragraph (e)(1) of this 

section, beginning not before age 55, 

and (if applicable) the make-up amount 

described in paragraph (e)(2) of this 

section; or, if the participant could have 

elected a lump sum under the subpart 

D plan, and the participant so elects 

under the missing participants program 

with the consent of the participant’s 

spouse, the lump sum described in 

paragraph (e)(3) of this section. 

(1) Annuity. The annuity described in 

this paragraph (e)(1) is either— 

(i) Joint and survivor annuity. A joint 

and 50 percent survivor annuity in an 

amount that is actuarially equivalent to 

the straight life annuity under paragraph 

(d)(1)(i) of this section as of the date that 

PBGC payments start (or, if earlier, the 

later of the participant’s normal 

retirement date or accrual cessation 

date), determined using the actuarial 

assumptions in § 4022.8(c)(7) of this 

chapter; or 

(ii) Other form of annuity. At the 

participant’s election, with the consent 

of the participant’s spouse, any form of 

annuity available to the participant 

under § 4022.8 of this chapter, in an 

amount that is actuarially equivalent to 

the joint and 50 percent survivor 

annuity under paragraph (e)(1)(i) of this 

section as of the date that PBGC 

payments start (or, if earlier, the later of 

the participant’s normal retirement date 

or accrual cessation date), determined 

using the actuarial assumptions in 

§ 4022.8(c)(7) of this chapter. 

(2) Make-up amount. If PBGC begins 

to pay the annuity under paragraph 

(e)(1) of this section after the normal 

retirement date (or accrual cessation 

date if later), the make-up amount 

described in this paragraph (e)(2) is a 

lump sum equal to the aggregate value 

of payments of the annuity that would 

have been payable to the participant 

beginning on the normal retirement date 

(or accrual cessation date if later), 

accumulated at the missing participants 

interest rate from the date each payment 

would have been made to the date when 

PBGC begins to pay the annuity. 

(3) Lump sum. The lump sum 

described in this paragraph (e)(3) is 

equal to the participant’s accumulated 

single sum. 

(f) Benefits with respect to deceased 

missing distributees who were 

participants. Paragraphs (g), (h), (i), (j), 

and (k) of this section describe the 

benefits that PBGC will pay with respect 

to a non-pay status missing participant 

of a subpart D plan who dies without 

receiving a benefit under the missing 

participants program. 

(g) De minimis benefit. If the benefit 

transfer amount of a participant 

described in paragraph (f) of this section 

is de minimis, PBGC will pay to the 

qualified survivor(s) of the participant a 

lump sum equal to the participant’s 

accumulated single sum. 

(h) Non-de minimis benefit; 

unmarried participant. In the case of an 

unmarried participant described in 

paragraph (f) of this section whose 

benefit transfer amount is not de 

minimis— 

(1) Death before normal retirement 

date. If the participant dies before the 

normal retirement date (or accrual 

cessation date if later), PBGC will pay 

no benefits with respect to the 

participant; and 

(2) Death after normal retirement 

date. If the participant dies on or after 

the normal retirement date (or accrual 

cessation date if later), PBGC will pay to 

the participant’s qualified survivor(s) an 

amount equal to the aggregate value of 

payments of the straight life annuity 

described in paragraph (d)(1)(i) of this 

section that would have been payable to 

the participant from the normal 

retirement date (or accrual cessation 

date if later) to the participant’s date of 

death, accumulated at the missing 

participants interest rate from the date 

each payment would have been made to 

the date when PBGC pays the qualified 

survivor(s). 

(i) Non-de minimis benefit; married 

participant with living spouse. In the 

case of a married participant described 

in paragraph (f) of this section whose 

benefit transfer amount is not de 

minimis and whose spouse survives the 

participant and claims a benefit under 

the missing participants program, PBGC 

will pay the spouse, beginning not 

before the participant would have 

reached age 55, the annuity (if any) 

described in paragraph (i)(1) of this 

section and the make-up amounts (if 

applicable) described in paragraph (i)(2) 

of this section, except that PBGC will 

pay the spouse, as a lump sum, the 

small benefit described in paragraph 

(i)(3) of this section. 

(1) Annuity. The annuity described in 

this paragraph (i)(1) is the survivor 

portion of a joint and 50 percent 

survivor annuity that is actuarially 

equivalent as of the assumed starting 

date (determined using the actuarial 

assumptions in § 4022.8(c)(7) of this 

chapter) to the straight life annuity in 

the amount that the subpart D plan 

would have paid the participant with an 

assumed starting date of— 

(i) The date when the participant 

would have reached age 55, if the 

participant died before that date, or 

(ii) The participant’s date of death, if 

the participant died between age 55 and 

the normal retirement date (or accrual 

cessation date if later), or 

(iii) The normal retirement date (or 

accrual cessation date if later), if the 

participant died after that date. 

(2) Make-up amounts. The make-up 

amounts described in this paragraph 

(i)(2) are the amounts described in 

paragraphs (i)(2)(i) and (ii) of this 

section. 

(i) Payments from participant’s death 

or 55th birthday to commencement of 

survivor annuity. The make-up amount 

described in this paragraph (i)(2)(i) is a 

lump sum equal to the aggregate value 

of payments of the survivor portion of 

the joint and 50 percent survivor 

annuity described in paragraph (i)(1) of 

this section that would have been 

payable to the spouse beginning on the 

later of the participant’s date of death or 

the date when the participant would 


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Federal Register / Vol. 82, No. 245 / Friday, December 22, 2017 / Rules and Regulations 60833 

have reached age 55, accumulated at the 

missing participants interest rate from 

the date each payment would have been 

made to the date when PBGC pays the 

spouse. 

(ii) Payments from normal retirement 

date to participant’s death. The makeup amount described in this paragraph 

(i)(2)(ii) is a lump sum equal to the 

aggregate value of payments (if any) of 

the joint portion of the joint and 50 

percent survivor annuity described in 

paragraph (i)(1) of this section that 

would have been payable to the 

participant from the normal retirement 

date (or accrual cessation date if later) 

to the participant’s date of death 

thereafter, accumulated at the missing 

participants interest rate from the date 

each payment would have been made to 

the date when PBGC pays the spouse. 

(3) Small benefit. If the sum of the 

actuarial present value of the annuity 

described in paragraph (i)(1) of this 

section plus the make-up amounts 

described in paragraph (i)(2) of this 

section is de minimis, then the lump 

sum that PBGC will pay the spouse 

under this paragraph (i)(3) is an amount 

equal to that sum. For this purpose, the 

actuarial present value of the annuity is 

determined using the actuarial 

assumptions in § 4022.8(c)(7) of this 

chapter as of the date when PBGC pays 

the spouse. 

(j) Non-de minimis benefit; married 

participant with deceased spouse. In the 

case of a married participant described 

in paragraph (f) of this section whose 

benefit transfer amount is not de 

minimis and whose spouse survives the 

participant but dies without receiving a 

benefit under the missing participants 

program, PBGC will pay to the qualified 

survivor(s) of the participant’s spouse 

the make-up amount described in 

paragraph (j)(1) of this section and to the 

qualified survivor(s) of the participant 

the make-up amount described in 

paragraph (j)(2) of this section. 

(1) Payments from participant’s death 

or 55th birthday to spouse’s death. The 

make-up amount described in this 

paragraph (j)(1) is a lump sum equal to 

the aggregate value of payments of the 

survivor portion of the joint and 50 

percent survivor annuity described in 

paragraph (i)(1) of this section that 

would have been payable to the spouse 

from the later of the participant’s date 

of death or the date when the 

participant would have reached age 55 

to the spouse’s date of death, 

accumulated at the missing participants 

interest rate from the date each payment 

would have been made to the date when 

PBGC pays the spouse’s qualified 

survivor(s). 

(2) Payments from normal retirement 

date to participant’s death. The makeup amount described in this paragraph 

(j)(2) is a lump sum equal to the 

aggregate value of payments of the joint 

portion of the joint and 50 percent 

survivor annuity described in paragraph 

(i)(1) of this section that would have 

been payable to the participant from the 

normal retirement date (or accrual 

cessation date if later) to the 

participant’s date of death thereafter, 

accumulated at the missing participants 

interest rate from the date each payment 

would have been made to the date when 

PBGC pays the participant’s qualified 

survivor(s). 

(k) Benefits under contributory plans. 

If a subpart D plan reports to PBGC that 

a portion of a missing participant’s 

benefit transfer amount represents 

accumulated contributions as described 

in section 204(c)(2)(C) of ERISA and 

section 411(c)(2)(C) of the Code, PBGC 

will pay with respect to the missing 

participant, at least the amount of 

accumulated contributions as reported 

by the subpart D plan, accumulated at 

the missing participants interest rate 

from the benefit determination date to 

the date when PBGC makes payment. 

(l) Date for determining marital status. 

For purposes of this section, whether a 

participant is married, and if so the 

identity of the spouse, is determined as 

of the earlier of— 

(1) The date the participant receives 

or begins to receive a benefit, or 

(2) The date the participant dies. 

§ 4050.407 PBGC discretion. 

PBGC may in appropriate 

circumstances extend deadlines, excuse 

noncompliance, and grant waivers with 

regard to any provision of this subpart 

to promote the purposes of the missing 

participants program and title IV of 

ERISA. Like circumstances will be 

treated in like manner under this 

section. 

Issued in Washington, DC. 

W. Thomas Reeder, 

Director, Pension Benefit Guaranty 

Corporation. 

[FR Doc. 2017–27515 Filed 12–21–17; 8:45 am] 

BILLING CODE 7709–02–P 


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