Orphan Plans - Part I (Posted May 15, 2004) Technical Tip 41: The following question and answer are from the DOL/EBSA website: The DOL has initiated a national program for identifying orphan plans and for ensuring that the benefits in those plans are distributed to participants and beneficiaries. A description of that program has been posted on the DOL’s Employee Benefits Security Administration (EBSA) website. The next three DOL Q&As are based on that posting. The first question is: What is an orphan plan? 401(k) retirement plans may become "orphan" when there is no one with authority operating the plan due to death or absence of the persons designated as fiduciaries, neglect to appoint successor fiduciaries, and corporate mergers or bankruptcies. The warning signs of an orphan 401(k) plan include: An employer who files for bankruptcy or merges with another company without first winding up the business affairs of a plan; Employees who stop receiving information, such as monthly or quarterly account statements, from the plan of a former employer; Employees who find themselves unable to contact their 401(k) plans or obtain benefits. Comment by the RLR&C ERISA attorneys: When participants or service providers determine that a plan has been--or may have been-- orphaned, they should contact the EBSA through either calling the toll-free number of 1-866-444-EBSA (3272) or by emailing the EBSA at www.askebsa.gov. Alternatively, the director of the local region of the EBSA could be contacted. Contact information is on the DOL’s EBSA website at www.dol.gov/ebsa. We are currently representing a plan provider who has identified approximately 50 orphan plans spread across the country. We are talking with EBSA officials about an efficient process for contacting plan fiduciaries to terminate and distribute the plans to participants and beneficiaries or, alternatively, for an independent fiduciary to be appointed. As a word of caution, plan providers should be slow to distribute benefits from orphan plans, even if participants are demanding their benefits. If a provider takes over a plan and makes distributions, the provider will be performing a fiduciary function and will be held to ERISA’s fiduciary standards in doing so. View all Tips © 2012 Reish Luftman Reicher & Cohen, a Professional Corporation Important notice: Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner's situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation.