U.S. Department of Labor Works With Insurers to Distribute Up to $116 Million to Retirement Plan Participants
WASHINGTON, DC – Metropolitan Life Insurance Company and Brighthouse Life Insurance Company have agreed to work with the U.S. Department of Labor to determine whether more than 2,000 retirement plans in their custody are abandoned. If plans are found to be abandoned, the companies will submit them to the Department's Abandoned Plan Program (APP). This may result in distributions of up to approximately $116 million to 20,000 participants. Ascensus Trust Company will be submitting plans to the Abandoned Plan Program on behalf of MetLife and Brighthouse.
The companies also have agreed to terminate and wind up 400 additional "de minimis" plans, and to distribute the assets to their participants. A de minimis benefit is one for which, considering its value and the frequency with which it is provided, is so small as to make accounting for it unreasonable or impractical.
The Department's Employee Benefits Security Administration (EBSA) approached the two companies regarding the assets of Employee Retirement Income Security Act (ERISA)-covered individual account plans that had no activity for at least 12 consecutive months.
A plan is considered abandoned if, among other things, no contributions to or distributions from the plan have been made for a period of at least 12 consecutive months. Such a plan may be appropriate for the APP if, after making reasonable efforts to locate the plan sponsor, it is determined that the sponsor no longer exists, cannot be located, or is unable to maintain the plan.
When a plan is abandoned, custodians (like MetLife and Brighthouse) are left holding the assets of the plan, but lack the authority to terminate the plan and to distribute the plan's benefits to participants. In such scenarios, participants and beneficiaries of the plan have great difficulty accessing the benefits they have earned. EBSA created its APP to address this situation. The program provides a safe and efficient process for winding up the affairs of abandoned individual account plans so that benefit distributions are made to participants and beneficiaries.
EBSA's New York Regional Office initiated the inquiry that led to the Department's agreement with MetLife and Brighthouse. Employee benefit plan participants in need of assistance can contact EBSA at 866-444-3272 or through https://www.dol.gov/agencies/ebsa/about-ebsa/ask-a-question/ask-ebsa. More information about the Abandoned Plan Program is available at EBSA's website, https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/abandoned-plans.