In late 2024, the U.S. Department of Labor (DOL) launched its long-anticipated Retirement Savings Lost and Found Database, a searchable tool designed to help participants track down retirement accounts they may have lost along the way.
The database was authorized under ERISA Section 523, as amended by SECURE 2.0 Section 303, making it a congressionally mandated initiative rather than just a DOL policy decision. On its face, the idea is simple: make it easier for retirees to reconnect with forgotten 401(k), pension, or employee stock ownership plan (ESOP) balances.
While the concept of a centralized database sounds like a simple solution, in practice, it does little to address the root causes of missing participants.
For employers, the real takeaway isn’t the lost and found itself, but the need to double down on sound plan administration: updating records, improving communication, and reducing the chance that accounts go missing in the first place.
Missing Plan Participants Lost & Found: A Voluntary, Narrow-Scope Tool
Unlike other reporting requirements, the DOL’s Lost and Found is currently voluntary. That means plan sponsors aren’t required to submit data — and in fact, many are hesitant to do so because of potential administrative and legal liability involved in uploading participant records under their own credentials. Additionally, some have raised concerns the database may conflict with certain state privacy laws since lost participants aren't consenting to being uploaded to the database.
The scope of the database is also limited:
- It only covers terminated, nonresponsive participants age 65 or older
- It relies on both sponsors submitting the data and participants actively searching for it, two conditions that rarely align
- In many cases, the Social Security Administration already alerts retirees to accounts they may have left behind when they file for benefits
- The current database is significantly scaled back from its original design, which would have included participants of all ages, beneficiary information, benefit amounts and nature (pretax/Roth), and IRA rollover details for small balance force-outs
- Plan sponsors must use a separate DOL intake portal rather than the familiar systems used for Form 5500 and 8955-SSA filings, creating additional administrative barriers
The DOL projected the tool might cover about 0.2% of retirement savers. That’s a fraction of the estimated 70–100 million people with retirement accounts. This limited impact is partly because the database essentially duplicates Form 8955-SSA reporting, but with less participant benefit — the SSA already notifies people about potential retirement benefits when they apply for Social Security benefits (often before age 65).
Why Plan Sponsors Should Still Pay Attention
If the tool is limited, why care? Plan sponsors and administrators need to weigh the pros and cons.
- Fiduciary perception: Even though participation is voluntary, ignoring the tool altogether could potentially raise questions about whether sponsors are doing enough to locate missing participants.
- Plan hygiene reminder: The new tool’s launch highlights the more important root issue, that if your plan has “lost” participants who qualify for this tool, it’s often a sign of deeper administrative and recordkeeping problems.
The Costs of Accumulating Missing Participants
Failing to address missing participants creates real financial and administrative burdens beyond compliance concerns:
- Service provider fees: Many providers charge "per participant," so allowing balances to "camp out" in the plan typically results in higher ongoing administrative costs
- DOL scrutiny: Form 5500 filings disclose the number of terminated participants awaiting payout, and the DOL may take note of plans with large numbers of such participants
- Unnecessary audits: Plans with 120+ participants (including those with account balances) become "large filers" subject to Independent Qualified Public Accountant audits
Best Practices for Avoiding Missing Participants
Rather than relying on the database as a safety net, ESOP sponsors should focus on practices that prevent accounts from becoming “lost” in the first place. The DOL’s Field Assistance Bulletin 2021-01 outlines key steps plan sponsors should already be taking:
- Maintain accurate census data: The DOL expects plan fiduciaries to take steps including certified mail, checking related benefit plan records, contacting designated beneficiaries, and using electronic search tools. Regularly update addresses and contact details using other internal benefit systems or beneficiary contacts
- Communicate clearly with participants: Ensure employees understand when and how they’ll receive their ESOP benefit upon termination or retirement
- Educate participants: Many employees underestimate their balances or assume small accounts aren’t worth tracking, when in reality even “forgotten” accounts can add up
- Use force-out provisions: Plan documents often allow sponsors to force out balances under $7,000 (expanded from $5,000 under SECURE 2.0), or to cash out participants at normal retirement age. This reduces lingering accounts that can inflate participant counts and trigger costly audits
- Follow distribution windows: Some plans allow only one (1) 30-day distribution period each year. Setting clear expectations helps increase response rates and prevents balances from lingering indefinitely
Additional Tools and Considerations
Plan sponsors should also consider these alternatives and additional resources:
- State unclaimed property funds: For balances of $1,000 or less, DOL Field Assistance Bulletin 2025-01 provides guidance on forcing out small balances to state unclaimed property programs, though this can be complex for multi-state employers
- National Registry of Unclaimed Retirement Benefits (NRURB): This broader, free database provided by PenChecks allows plan sponsors to upload lost participant information and appears more robust than the DOL database, though it has similar limitations requiring both sponsor uploads and participant searches
- Service provider search tools: Ask your TPAs and recordkeepers what additional services they offer for locating missing participants, such as address verification services
Bottom Line for ESOPs and Other Sponsors
For now, the DOL Lost and Found Database isn’t quite ready for prime time. Its limited scope, outdated data sources, and voluntary participation mean it simply can’t be the solution to the missing participant challenge on its own.
Instead, plan sponsors should view it as a wake-up call: a prompt to revisit plan administration and recordkeeping, participant communication, and force-out provisions. Proactive ESOP administration remains the most effective way to keep plans compliant, efficient, and participant-friendly.
Most importantly, the database doesn't absolve plan sponsors of their fiduciary responsibility to track and locate missing participants; it's one tool among many to consider.
For companies managing both an ESOP and a 401(k), administrative and recordkeeping complexity multiplies. Evaluating whether to bundle third-party administration services for both plans or keep them separate is an important step in ensuring your retirement benefits are well-managed and aligned with your company’s goals. Our guide helps you weigh the pros and cons of bundling 401(k) and ESOP TPA services — just click the link below to download your copy.
