The ERISA Industry Committee (ERIC) wants the Department of Labor to back off from requiring retirement plans to provide what it calls excessive amounts of participant information for its SECURE 2.0-mandated “Retirement Savings Lost and Found” database.
“The DOL’s Lost and Found proposal needs to be significantly restructured to create a secure, focused, and useful tool for participants that adheres with the law.”
ERIC’s Andrew Banducci
This week, ERIC pressed the Employee Benefits Security Administration (EBSA) at the DOL to redraft its proposed guidance implementing the Lost and Found database. ERIC, a national advocacy organization that exclusively represents large employers that provide health, retirement, paid leave, and other benefits to their nationwide workforces, called on the agency to reissue a request that adheres to the statutory requirements outlined in SECURE 2.0, safeguards worker data, and avoids needless costs.
As prescribed in SECURE 2.0, Congress intended the Lost and Found database to help retirement plan participants locate a plan administrator so they can claim their retirement benefits, the organization notes in a June 17 letter to EBSA, from Andrew Banducci, Senior Vice President, Retirement and Compensation Policy at ERIC.
SECURE 2.0 directs EBSA to establish the search tool by Dec. 29, 2024.
The law outlines the necessary information DOL is authorized to request from plan administrators. However, ERIC says the DOL’s proposal asks for plans to provide excessive amounts of additional information outside the scope of SECURE 2.0, unrelated to the purpose of the database. Furthermore, the organization says the proposal raises significant privacy concerns and questions about efforts to coordinate with the Internal Revenue Service (IRS) to access existing information needed to build the database.
“While creating tools to reunite participants with their retirement benefits is a key priority for ERIC and our member companies, the DOL’s Lost and Found proposal needs to be significantly restructured to create a secure, focused, and useful tool for participants that adheres with the law,” Banducci said in a statement. “Unfortunately, the proposal overreaches by asking for too much information and failing to detail the cybersecurity measures needed to protect the data and privacy of plan participants. ERIC looks forward to working with the agency to make these needed improvements.”
ERIC highlighted several areas of concern identified in the proposal. Those include:
• The proposal requests far more information from plan administrators than necessary and exceeds the authority permitted under the statute.
• The proposal lacks details about how the DOL will safeguard worker and retiree data and does not include a process for notifying plan administrators and plan participants in the case of a data breach.
• The proposal does not coordinate with the IRS to integrate existing data into the building of the database.
• Despite the “voluntary” nature of the request, the proposal threatens potential enforcement actions against plan administrators who do not fully participate.
“The Department of Labor simply does not need this much information in order to build the database described in Section 303 of SECURE 2.0, which again was designed to provide participants enough information to locate their plans,” Banducci’s letter to EBSA states.
ERIC member companies sponsor retirement plans, including defined benefit and defined contribution plans, governed by the Employee Retirement Income Security Act of 1974, as amended (ERISA).
Click here to read ERIC’s comments.
SEE ALSO:
- ‘Lost & Found’ Database: DOL Seeks Recordkeeper Help
- EBSA Recovered $1.4 Billion in 2023 for Employee Benefits Plans, Participants and Beneficiaries
- How to Find—And Claim—A Lost 401(k)
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
