IRS Discontinues Letter-Forwarding Program

On August 31, 2012, the Internal Revenue Service issued Revenue Procedure 2012-35 revising the scope of their letter-forwarding program. Revenue Procedure 2012-35 provides that the IRS will no longer forward letters on behalf of plan sponsors or administrators of qualified retirement plans or qualified termination administrators (QTAs) of abandoned plans under the Department of Labor's Abandoned Plan Program who are attempting to locate missing plan participants and beneficiaries.

In particular, this change affects retirement plan sponsors and administrators who are searching for plan participants or beneficiaries in order to correct failures that require payment of additional benefits in accordance with the Employee Plans Compliance Resolution System (EPCRS), as described in Revenue Procedure 2008-50, 2008-35 IRB 464. Accordingly, in future guidance on EPCRS, the IRS intends to provide an extended correction period for plan sponsors and administrators affected by this change in the letter-forwarding program.

The IRS explained that since the letter-forwarding program began, numerous alternative missing person locator resources, including the Internet, have become available to assist a plan sponsor or plan administrator in locating a missing participant or beneficiary owed a retirement benefit.

The change applies to requests postmarked on or after August 31, 2012. Requests that are postmarked prior to that date will continue to be processed pursuant to Revenue Procedure 94-22, 1994-1 CB 608.

Benefitslink.com has the full text of Revenue Procedure 2012-35 here.

This article on Locating Lost or Missing 401k Plan Participants may of help explaining alternative methods.

Rick Meigs, President, 401khelpcenter.com

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