On August 31, 2012, the IRS issued Rev. Proc. 2012-35 and a related press release announcing that effective immediately, the IRS will no longer forward letters on behalf of plan sponsors or administrators of qualified retirement plans to assist in locating missing participants and beneficiaries of vested pension benefits.
Under a 2004 Department of Labor Field Assistance Bulletin, plan fiduciaries were advised to make reasonable efforts to locate missing plan participants as an exercise of their fiduciary obligations to qualified retirement plans. One of the suggested methods of demonstrating reasonable efforts suggested was the use of the IRS Letter Forwarding Program. According to the Revenue Procedure, the IRS is not eliminating the Program completely but has limited a third party’s use of the Program to situations in which the third party is trying to locate a taxpayer to convey a message for a “humane purpose” or in an “emergency situation.” A “humane purpose” is one in which a person is seeking to find a missing person to convey a message of an urgent or compelling nature. Examples given include: a need to notify a person of a serious illness, imminent death or death of a close relative, to convey an urgent or compelling message or to help locate a person for a medical study to detect and treat diagnosed medical defects or communicable diseases.
With the elimination of this Program, plan sponsors searching for missing plan participants will be limited to using a similar program offered through the Social Security Administration, computer Internet search techniques or commercial people locators.