The Annual Funding Notice (AFN) is a required yearly notice defined benefit pension plans send to their participants and beneficiaries that provides updates on the financial status of the pension plan. The Department of Labor (DOL) provides templates on their website with guidance on what information should be included such as how well the plan is funded, year-end assets and liabilities, funding/investment policies and other key items.

AFNs are for information purposes and do not require the recipient to take any action. Generally, they must be sent no later than 120 days after the close of the plan year.

Where it gets complicated is when it comes to making sure the AFN was delivered to it’s intended recipient. Participants and beneficiaries cannot be relied upon to self-report when someone moves or passes away. With 1 in 8 Americans moving each year, in a pension population that adds up quickly to how many addresses likely need to be updated. We’ve processed thousands of population files and find that there’s typically over 30% of addresses that need updating.

When a pension plan receives returned mail, the time-consuming process of locating that missing participant or beneficiary begins. The DOL released guidelines around finding missing participants, however, the easiest way to handle returned mail is to avoid it in the first place.

This is why we have developed multiple locate solutions. Although Data Scan and Data Cleanse do reduce returned mail, the information is not confirmed, so returned mail is still expected. To drastically reduce return mail, we recommend using CertiSearch® or CertiCensus® as they take significant steps that align with the DOL missing participant guidelines to confirm a participant’s information.

Here’s a side-by-side look at our locate solutions:

 

  Data Scan Data Cleanse CertiSearch® CertiCensus®
Pros:
  • Provides one unconfirmed best-known address, date of birth, phone number and name

All the pros of Data Scan, plus:

  • One-time validated death audit
  • Attempts to correct SSNs
  • Receive up to three unconfirmed best-known addresses

All the pros of Data Cleanse, plus:

  • Outbound mailings and phone calls to confirm address
  • Aligns with DOL’s missing participant guidelines
  • Attempts to find beneficiaries
  • Social media searches
  • Weekly updates with confirmed data
  • Detailed reporting

All the pros of CertiSearch, plus:

  • Sends AFN or other required mailing for you (includes postage)
  • Locates missing participants quarterly
  • On-going death audit and beneficiary searches
  • Quarterly address updates
  • Online portal access
  • Comprehensive reporting
  • Dedicated Account Manager
Cons:
  • No death check
  • Expect returned mail due to unconfirmed address check
  • A one-time service, so data could get outdated quickly
  • Expect returned mail due to unconfirmed address check
  • A one-time service, so data could get outdated quickly
  • A one-time service, so data could get outdated quickly
  
Estimated Timeline: 1 day 2-3 days 10-14 weeks On-going

Many of the organizations we work with find the value of saving postage on mailing to incorrect addresses and the time saved on dealing with returned mail has allowed them to focus on other important projects. In addition, they can communicate more effectively with their population. To learn more about our locate solutions, visit our locate page or contact us.