Uncashed checks are still considered to be plan assets, incur added expense, can complicate a plan closure, and overall are a liability. Did you know that the average size of a missing retirement plan participant’s benefit due is projected at $2,600-2,800? (as stated in a webinar by PENCHECKS last month).

Why do participants vanish into thin air?

  1. Not alerting their former employers that they moved- becoming increasingly common with millennials.
  2. Some current and former employees are unaware that benefits they have with a company exist! This sounds surprising, but sadly it is not out of the ordinary.
  3. Not recognizing the company name: participants are often non-responsive because their former company had been sold, they are unaware of the new company trying to reach out to them or may think it’s a scam and ignore their correspondence.

Why would these checks go uncashed?

  • Bad address
  • Moved
  • Never received or the check was lost in the mail
  • Thrown away by mistake
  • Forgot about it
  • Deceased

There are many measures that can be taken when a participant with an uncashed check goes missing. One of the main concerns (what to actually do with funds) is largely due to no guidance received from the DOL or IRS.

One thing is for certain, when locating a participant it is imperative that the process be documented (think PBI’s Confirmed Locate Service).   It is always a best practice to keep up with your population’s whereabouts before it becomes an issue.  Still, lost participants are unavoidable and present a fiduciary liability even with the most conscientious record keeping.



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