The department currently deals with abandoned plans on a case-by-case basis, often with the involvement of the courts. According to the DoL announcement, the final rules provide standards for determining when a plan is abandoned and establishes a process for winding up the affairs of the plan and distributing benefits to workers. The final rules should eliminate the need for costly court approvals and allow workers to gain access to their benefits sooner.
“Today’s rules will help workers gain access to their retirement benefits by empowering financial institutions that hold the assets of abandoned plans,” said Assistant Secretary of Labor Ann Combs, in the announcement.
The department estimates that 1,650 401(k) plans, covering 33,000 workers, are abandoned by their sponsors each year.
The final rules will be published in the Federal Register for April 21, 2006.