PURPOSE

The purpose of this policy is to establish a procedure for locating persons to whom benefits
are owed and for whom SCERS does not have current contact information.

POLICY

On occasion, a member, beneficiary, estate, or other person entitled to payment of benefits (including, but not limited to, a return of accumulated contributions, required minimum distributions, or underpayment corrections) may fail to claim the payment or cannot be located to make payments from the plan (missing payee). When this occurs, the Board shall, through staff, attempt to locate the missing payee. Specifically, staff shall take all of the following steps:

1. Search SCERS’ records and employer records for the missing payee’s last known address and other contact information;

a. For missing payees who are reciprocal members, staff shall attempt to obtain contact information from the reciprocal system.

b. Attempt to identify and contact any individual that the missing participant
designated as a beneficiary (e.g., spouse, children, etc.) to find updated
contact information for the missing payee.

2. Search publicly available records or directories for alternative contact information,
utilizing internet search tools that do not charge a fee to search for a missing
participant or beneficiary, including but not limited to, internet search engines, public
record databases (such as those for licenses, mortgages and real estate taxes),
obituaries, and social media.

3. Engage a commercial locator service, credit reporting agency, or proprietary internet search tool;

4. Attempt to contact the missing payee via U.S. Postal Service certified mail to the missing payee’s last known mailing address (with return receipt requested);

a. The certified mail communication shall identify the type of payment to which the missing payee is entitled – e.g., accumulated contributions, death benefit, underpayment correction, etc.

b. If applicable, the certified mail communication shall provide notice that the funds, if unclaimed, will be deposited in and become a part of the pension plan’s reserve after the applicable number of years – e.g., five years in the case of death benefits (Gov. Code § 31783.5) or in the case of returning accumulated contributions to members first employed after January 1, 1976 (§ 31628); ten years in the case of returning accumulated contributions to members first employed before January 1, 1976 (§ 31628); or any other duration provided in the CERL.

5. Attempt to contact the missing payee through other appropriate means for any other available information – e.g., other mailing addresses, email addresses, and telephone numbers.

a. If staff is successful in making contact with the missing payee by telephone or email, staff shall attempt to obtain a mailing address from him or her and then perform the steps in Paragraph 4 using the working mailing address.

6. Maintain a written record of having taken each of these steps.

After taking the above steps to contact the missing payee, staff shall administer the unclaimed benefits payments in accordance with the terms of the CERL. Where required by the CERL (e.g., Gov. Code §§ 31783.5, 31628), the unclaimed benefits payment shall be held for the specified number of years after the last attempted contact, and if not claimed within that time, shall be deposited in and become a part of the pension plan’s reserve.

This policy does not address the scenario in which the missing payee comes forward after the unclaimed amounts have been deposited in the pension plan’s reserve.

BACKGROUND

When SCERS is unable to locate a person to whom benefits are owed, SCERS is at risk of not meeting its various payment obligations under the law – e.g., benefits payments under the County Employees’ Retirement Law; required minimum distributions under Internal Revenue Code section 401(a)(9); and full error corrections pursuant to the IRS’ Employees Plans Compliance Resolution Program. This policy sets out a procedure for addressing these situations. In particular, this policy sets out a reasonable process for locating missing payees that complies with Government Code section 31783.5. In addition, this policy complies with IRS guidance for locating missing payees for the purposes of required minimum distributions and error corrections. See Internal Revenue Service, Internal Revenue Manual 4.70.13.3.4.1.2(13)(highlighting what constitutes a diligent search for a missing participant or beneficiary under IRC section 401(a)(9)); Rev.Proc. 2021-30, Section 6.02(5)(d)(re: “Locating Lost Participants”). In short, compliance with this policy would
enable SCERS to comply with the CERL and to maintain its tax-qualified status even when payee cannot be located.

RESPONSIBILITIES

Executive Owner: General Counsel

POLICY HISTORY

Date	Description
04-17-2024	Board re-affirmed policy with minor amendments
04-21-2021	Board approved policy

SCERS Policy No. 42