If only the pension world had its own version of a Bat-Signal, sending a lighted symbol high into the sky to let missing plan members know to reach out and provide their new contact information. Until that time comes to our fair land, plans will have to rely on their other powers of location.
For super insights and expertise, we turned to Rupe Prasad, CEBS, partner with PBI Actuarial Consultants Ltd. in Vancouver, British Columbia, who presented “Tips and Tricks for Locating Missing Members” at last year’s Annual Canadian Employee Benefits Conference and provided the following information for a Q&A in the May/June 2019 issue of Plans & Trusts.
The Mystery of the Missing Members
The number of missing members in pension plans has been increasing due to factors such as incomplete records from company closures, lost data during administrative transfers, temporary workforces, immediate vesting policies, federal and provincial privacy rules, and the closure of the National Search Unit that, until 2015, had helped administrators find missing members for a small fee.
Doing Your Legal and Fiduciary Duties
Historically, once employers had met their obligations by sending a required pension document to a member’s last known address, the responsibility shifted onto the member until a subsequent request was received. More recently, however, with the release of policies or guidelines from regulators or the Canadian Association of Pension Supervisory Authorities, the recordkeeping responsibility has extended beyond members to include plan administrators.
Under federal or provincial minimum pension standards legislation, plans have a legal responsibility to send prescribed documents to members by required deadlines. Also, under the Income Tax Act, pension benefits must commence no later than the end of the year in which a member turns 71. Plans also have fiduciary obligations to pay benefits in a timely manner and to retain and maintain accurate records.
With all of this in mind, administrators should proactively establish a policy identifying the processes involved in the retention and management of such records.
To the Review-Mobile!
Among the many documents used in pension plan administration are enrolment cards, beneficiary designation forms, plan booklets, annual pension statements, benefit calculation statements, and pensioner or disability audit letters. Reviewing your plan documents on a regular basis is important to prevent missing members.
For example, on your beneficiary form, do you ask members to provide an alternate contact person besides the designated beneficiary? Do you ask members and beneficiaries for personal email addresses, social media accounts and phone numbers? If you employ temporary foreign workers, do you ask for an address or phone number in their home country?
Prasad notes that a policy to help prevent missing members should consider the following factors.
- Plan size and demographics. Review the size of your plan and the number of missing members to determine the best search methods.
- Applicable legislative rules, policies or guidelines. Be aware of your options and obligations.
- Costs. Set limits on search costs. Factor in the cost to perform each search method and the amount of the member’s benefit.
- Documentation. How will you document which steps were performed, by whom and when? If the search is unsuccessful, what are the next steps?
- Efficacy. Review the policy for efficacy, and revise accordingly. For example, maybe a particular social media platform is not effective. What are other search methods, and which should be used first?
Helping Members Help Themselves
Plans should also be proactive and remind members to update their contact information by:
- Including wording in plan booklets, annual pension statements and benefit calculation statements
- Including a moving notice with annual statements to remind members to fill out the form and provide a new address
- Using the plan website for reminders and to allow members to update their information directly online
- Posting notices in lunchrooms or at the union office.
When a Member Goes Missing
Prasad said the first option for finding a missing member would be to look at the member’s file for data such as a phone number, email address, or information related to a beneficiary or legal representative. Other options include:
- Contacting the union office, employer or plan custodian/financial institution
- Searching the internet or social media sites
- Reviewing obituaries in local newspapers
- Conducting a search of death registries, government databases or public records
- Using broad-based communications (newsletters, websites, newspapers, radio stations)
- Hiring a professional search company
- Contacting professional or retiree associations
- Using the Canada Revenue Agency Letter Forwarding Service (to be used last, once all other search methods are exhausted)
- Reporting missing members to a government website (in jurisdictions where available)
- Applying for a waiver to be exempt from minimum pension legislative requirements (in jurisdictions where available)
- Transferring to an unclaimed property society or entity (available in British Columbia, Alberta and Quebec and currently being reviewed under federal jurisdiction).
You don’t need superpowers to help your missing-member policies take flight. But with proper review, prevention and planning, you may become a hero to plan members who would otherwise be losing out on vital pension benefits.
[Related Reading: What You Need to Know About the New DBplus and OPTrust Pension Plans]
Robbie Hartman, CEBS
Editor, Publications, for the International Foundation