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Posted by Paul Thomas, CPA on November 15, 2007, 3:01 pm
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> I know this is slightly off-topic, but thought I would try
> the expertise that resides in this group anyway!
>
> I deal with a few 401k / pension plans at my job and over
> the years, we have lost contact with some participants in
> the plans. One plan is probably 30 years old and there are
> a few individuals that we've not had contact with in that
> plan for well over 10 years.
>
> I tried searching some various websites just to test the
> waters and see if I could find some recent participants that
> cannot be located and had very little success. These were
> free sites that I searched. I know there are sites that
> charge so much per search or so much for a limited amount of
> time, but felt that seemed quite pricey to search for 30-40
> people either individually or over a limited length of time.
>
> Has anyone had a great amount of success with any particular
> 'search' site in finding people in this situation? I don't
> really want to pay $50-$60 per search, particularly when a
> lot of the recent 'lost' participants' accounts only have a
> few hundred dollars in their accounts.
>
> One plan will be terminating in the near future and so we
> are trying to find these individuals so we can get their
> account balances paid out to them or transferred to another
> plan for their benefit. My understanding is the state of
> Kansas (where I am located and the plans are located) do not
> want these funds to put in the unclaimed property division
> any longer.
Good Lord. Why?
You should probably double check wiht the UP division for
the state, becfause you seem to have received bad
information.
http://www.kslegislature.org/legsrv-statutes/getStatute.do?number=22551
(14) property in an individual retirement account, defined
benefit plan or other account or plan that is qualified for
tax deferral under the income tax laws of the United States,
three years after the earliest of the date of the
distribution or attempted distribution of the property, the
date of the required distribution as stated in the plan or
trust agreement governing the plan, or the date, if
determinable by the holder, specified in the income tax laws
of the United States by which distribution of the property
must begin in order to avoid a tax penalty;
So it seems you have to close the plan per the plan
documents and/or the federal laws that apply, send the check
to the last known address of record, issue all 1099-R's
(probalby do backup withholding to boot), if the IRS notice
of deficiency to the recipient doesn't get them to contact
you......then it seems that three years later you can send
it to the state.
Be real sure to run all this by your tax accountant (CPA or
EA) and/or attorney to make this water-tight.
> If we can't locate these individuals, an option
> that has been presented to us is to set up an account to
> accept this money (keeping it completely segregated) and
> keep looking for them. If we find an individual or they
> find us, then we can pay them a proportionate amount of
> money from this account to them at that time.
And yes, after you do all of the above "distribution"
efforts you may want to then shift those funds to a separate
account, and the attorney can tell you if it needs to be
interest bearing or not. Then three years out you can send
it to the state.
--
Paul A. Thomas, CPA
Athens, Georgia
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