The difference between comprehensive Locate services and simple data updates.
Pension plan professionals – plan sponsors, trustees, administrators, etc. – have a fiduciary responsibility, actually a requirement, to conduct diligent searches for participants and beneficiaries. There are various methods to doing this. Knowing the difference will not only help ensure you are meeting your fiduciary obligations; but, will also best prepare you for any possible regulatory reviews or audits (DOL/IRS).
The most inexpensive and quickest method of locate service is updating participant or beneficiary data, e.g. addresses, social security numbers or other personally identifiable information. But, don’t be fooled. This approach of updating data will not satisfy the DOL/IRS recommendations for locating missing participants. This is an unconfirmed address search meaning there is no verification with the participants themselves regarding current address. As a result, returned mail is still a possibility. In order to confirm the information, you will still have to execute some type of outreach. For small Plans with dozens or even hundreds of participants, this approach might be acceptable if the Plan has internal resources to conduct and track outreach programs against the updated data. However, even if this is the case, Plans should consider whether they have an auditable trail accurately documenting their efforts should the DOL/IRS come calling!
A true Locate service includes not only updating information, but also confirming information and providing an auditable trail of all steps, timing, and results. To ensure Plans are meeting their fiduciary obligations of locating participants/beneficiaries, PBI Research Services has designed the industry’s premier Locate products which include updating address information, executing outreach, and tracking the entire process. Outreach methods include mailings and outbound phone calls. Respondents have multiple ways of confirming information including returning a letter, using an online portal, or calling in to confirm their information. Importantly, PBI tracks every step of the process. At the completion of a project, clients receive a report detailing every person PBI attempted to locate, the method of location attempted (time and date stamped), and whether the person was/wasn’t located. This summary report is often used by customers for DOL/IRS audits and is a key reason for using PBI’s comprehensive auditable trail service versus a piecemeal service consisting of data providers, internal resources and/or mailhouses/callcenters.
For more information about which Locate service best meets your needs, we invite you to contact us.
