When a 401(k) participant leaves your company, keeping their contact information up to date helps you stay compliant with IRS and DOL requirements and makes sure they get any legally required notices. This article explains why accurate records matter and how to locate a former employee when you need to reach them.
When an employee leaves your company, keeping their most up-to-date contact information on file is important. Having complete and accurate records allows Gusto Retirement to respond to any requests by the Internal Revenue Service (IRS) or Department of Labor (DOL) in the event of a claim by the former employee or an audit of your plan, dating back up to six years.
Two key reasons this matters:
Required minimum distributions (RMDs): The IRS reviews whether your plan complies with RMD standards for former employees.
Legally required notices: The Employee Retirement Income Security Act of 1974 (ERISA) and current regulations require specific notices or disclosures to be sent to eligible employees and plan participants — including those who have left — when certain events occur.
If Gusto Retirement does not have accurate participant contact information, we rely on the plan sponsor to locate that person and provide them with important notices.
Pro tip: When an employee leaves, remind them to continue monitoring their account and keep their Gusto Retirement account information current, just as they would with any other financial institution. This includes updating their physical and email addresses, phone numbers, and other important details.
Here are several ways to reach a former employee about required plan information.
Use available contact information. Try reaching the former employee using their last known physical or email address, phone numbers, designated beneficiaries, or emergency contact. Any attempt to contact them through the United States Postal Service (USPS) should be via certified mail to the last known mailing address.
Search public records and directories. Look for alternative contact information through publicly available sources. LinkedIn and other social media can be effective in tracking down missing or unresponsive former employees.
Use a commercial locator service. If the steps above are not successful, retain a commercial locator (skip-tracer) search service or a proprietary internet search tool. You can retain your own search service or contact Gusto Retirement for assistance locating missing participants through a commercial search service we select.