On April 15, the Department of Labor (“DOL”) published a Notice of Proposed Information Request (the “Notice”), outlining its plan to create the Retirement Savings Lost and Found required by SECURE Act 2.0. Although currently in proposed form, practitioners should begin to familiarize themselves with the Notice’s requested information, reporting system, and proposed timeline.
Background
SECURE Act 2.0 requires DOL to create the Retirement Savings Lost and Found to help missing participants and beneficiaries locate the plan administrators of their old retirement plans. By law, DOL must have the database established by December 29, 2024. Practitioners’ expectations had been for DOL to leverage Form 8955-SSA, which plan administrators file annually with the IRS, to obtain the required plan participant information, but the IRS has refused to share Forms 8955-SSA with DOL, citing concerns about disclosure of confidential information. The Notice outlines DOL’s new approach to obtaining the information.
What Employers Need to Know
The new approach has several characteristics that plan sponsors should know. First, submitting information to DOL pursuant to the Notice is, for now, voluntary, unlike filing Forms 8955-SSA. Second, the submission will be made either as an attachment to a plan’s Form 5500, beginning with plan year 2023’s filing, or through a separate, not yet created, secure portal. DOL will provide a template spreadsheet for plan administrators to use (in .CSV format) to submit this information. Importantly, the submitted data will not be available to the public, even though Forms 5500 are.
The voluntary nature of the proposal brings into question how many employers will actually participate in the Lost and Found program. DOL believes that plan sponsors following best practices should already have most of the information available. However, the scope of the requested data reaches back to when a plan first became subject to ERISA, which could span decades. Additionally, coinciding the collection effort with Form 5500 filings, which often come with financial audits of the plans and other burdensome requirements, could lead to a compressed timeline for plan sponsors.
Conclusion
While the system is not yet finalized, plan sponsors should stay aware of the ongoing changes with the Retirement Savings Lost and Found information reporting system. The Notice remains open to public comment through June 17, 2024, so the final rule may vary.
