Department of Labor Proposes Voluntary Procedure for Retirement Savings Lost and Found Database

The Department of Labor (DOL) has proposed a voluntary procedure for plan administrators to submit participant data to the Retirement Savings Lost and Found database, as the Internal Revenue Service (IRS) cannot legally share Form 8955-SSA data. The public has until June 17, 2024, to provide comments on the proposal.

The SECURE 2.0 Act of 2022 directed the DOL to establish this database, but the IRS determined it could not share the required data due to confidentiality and disclosure requirements. Consequently, the DOL has developed a process to collect information directly from plan administrators on a voluntary basis, including data for current and former participants.

Plan administrators would provide the information through a report filed with the annual Form 5500 or Form 5500-SF, but the submission would not be considered part of the Form 5500. The DOL is working to establish the Lost and Found database by the December 29, 2024 deadline set by Congress, despite the implementation challenges.

Why this matters: The proposed Retirement Savings Lost and Found database aims to help individuals locate their former retirement plan information more easily. This initiative addresses the issue of plan administrators losing track of participants and beneficiaries, and vice versa, which can occur due to factors like recordkeeping challenges, business closures, or mergers and acquisitions.

The proposal acknowledges the need to protect the data and states that multiple security measures will be in place. Plan administrators will need to weigh the benefits and risks of voluntarily providing the data, as the DOL has not yet provided incentives or clarified the costs that can be paid from plan assets.

The DOL's request for public comment on the proposal is based on the existing Terminated Vested Participants Project (TVPP) for defined benefit pension plans. Interested parties can submit comments on the proposal through June 17, 2024, as the DOL works towards the congressionally mandated deadline to establish the database by December 29, 2024.

Key Takeaways

• DOL proposes voluntary procedure for plan admins to submit participant data to Retirement Savings Lost and Found database.
• IRS cannot legally share Form 8955-SSA data, so DOL developed process to collect info directly from plan admins.
• Plan admins can provide data through annual Form 5500 or 5500-SF, but submission not considered part of the form.
• Database aims to help individuals locate former retirement plan info, addressing issue of lost participants/beneficiaries.
• DOL requests public comments on proposal by June 17, 2024, to establish database by Dec 29, 2024 deadline.