To Keep Pension Plan Liabilities Accurate, Get to Know Participants’ Marital Status

Mindy Zatto and Mary Shah, with Strategic Benefits Advisors, discuss how keeping up with pension plan participants’ marital status can reduce instances of ‘lost’ participants and misstated liabilities.

In recent months, sternly worded communications from the U.S. Department of Labor (DOL) have put pressure on plan administrators to improve their processes for locating lost pension plan participants. But what about finding surviving spouses?

The vast majority of pension plans are designed to pay benefits to a spouse upon the participant’s death, even if that death occurs pre-retirement. Confirming marital status when a participant dies is an important part of a plan administrator’s responsibilities under the 1984 Retirement Equity Act—and one that’s not always easy to fulfill.

When a plan participant who is no longer an active employee dies, a family member or estate executor may inform the plan administrator directly, making it easy to determine if there is a surviving spouse. But, more commonly, administrators become aware of a participant’s passing during a routine audit of the plan population by a third-party search provider.

When a plan administrator has good reason to believe that a participant is deceased, the next step is to send an “evidence of existence” letter to the participant’s last known address. If the participant is, in fact, still living, the letter implores him to contact the plan administrator to straighten out the situation. If he is deceased, the letter invites surviving kin to contact the plan administrator to find out if a benefit is due.

Where Things Fall Apart

But what happens when the “evidence of existence” letter goes unanswered — as happens more often than not, in our experience? When plan administrators cannot verify a deceased participant’s marital status, things generally unfold one of two ways: (a) the administrator decides there must not be a spouse and writes off the participant and associated plan liability, claiming no benefit is due; or (b) the administrator recognizes that marital status cannot be determined and keeps the liability on the books indefinitely.

Both approaches are problematic. The first may result in plan sponsors understating their liabilities, whereas the second may result in overstating plan liabilities. And plan sponsors should bear in mind that there is no regulatory framework for “writing off” benefits just because a deceased participant’s marital status cannot be determined. The DOL already requires that plan administrators extend their efforts to locate lost participants beyond a basic third-party address search; similarly, determination of marital status for deceased participants could eventually become an area of focus for DOL plan auditors.

Applying Elbow Grease

Determining marital status—particularly in the event of a participant’s pre-retirement death—takes legwork and personalized attention. Here are some tactics we have used with great success:

  • Check funeral homes and local obituaries for death announcements that may not appear in state data and use them to identify the deceased’s next of kin;
  • Mine employee data, such as old health and welfare or life insurance plan records, for the name of the participant’s spouse or a family member who could verify the participant’s marital status; and
  • When available, source death certificates that identify the deceased’s marital status from state agencies.

We apply advanced search tactics that take into account a nuanced understanding of the search protocols of various systems of record. For instance, sometimes a search for the obituary of “John L. Doe” is too limiting, causing death records for “John Doe,” no middle initial, to be overlooked. We also expand the area of our searches beyond the participant’s last known city or state of residence.

Foresight Pays Dividends

Plan sponsors not only have a fiduciary obligation to identify spouses who may be owed a benefit, they also have a responsibility to company stakeholders to ensure plan liabilities are reported as accurately as possible. Whether or not the DOL makes marital status determination a focus of pension plan audits—as we suspect will eventually happen—plan sponsors can save money in the long term by identifying marital status early on and keeping track of surviving spouses until benefits are due.


Mary Shah, FSA [ Fellow, Society of Actuaries], EA [Enrolled Actuary], and Mindy Zatto, FSA, EA, MAAA [Member, American Academy of Actuaries] and FCA [Fellow, Conference of Consulting Actuaries], are principals of Strategic Benefits Advisors, an independent, full-service employee benefits consulting firm focused on solving complex benefits issues for clients ranging from 500 to over 300,000 employees. Shah and Zatto have almost 60 years’ combined experience in benefit plan administration and consulting. They can be reached at

This feature is to provide general information only, does not constitute legal or tax advice, and cannot be used or substituted for legal or tax advice. Any opinions of the author do not necessarily reflect the stance of Institutional Shareholder Services or its affiliates.