For many pension plans, annual proof-of-life campaigns are more important than ever under SECURE 2.0.
While recovering overpayments has become less burdensome, the financial risk of undetected overpayments remains significant. In today’s environment of increasing cyber fraud and identity theft, establishing a regular process to verify retiree status is a prudent risk management practice.
Remember, plan communication doesn’t stop at termination. You are not only identifying immediate overpayments, but you’re staying in touch with your plan participants and giving their family a point of contact to prevent a future one when they do pass away.
- Prevent Costly Overpayments
When a retiree passes away and the plan is not notified promptly, benefit payments may continue for months or even years. These overpayments can create administrative burdens, tax complications, and financial losses for both the plan and participants’ families.
An annual proof-of-life campaign helps confirm:
- The retiree is living and receiving benefits appropriately
- Contact and payment information remain accurate
- Retirees can still be reached when important plan communications are needed
- Reduce Financial Risk Under SECURE 2.0
Recent legislative changes have made recovering inadvertent overpayments more challenging. As a result, preventing overpayments is often far less expensive than correcting them after the fact.
A proactive verification process can help avoid:
- Unrecoverable benefit overpayments
- Administrative correction costs
- Tax reporting issues and participant confusion
- Additional trust and operational expenses
- Demonstrate Fiduciary Prudence
Regular proof-of-life campaigns provide documented controls designed to minimize payment errors and monitor retirees. These campaigns support a prudent governance process and help sponsors fulfill their fiduciary responsibilities.
- Protect Retirees from Fraud
Retirees are frequently targeted by financial criminals and identity thieves. Annual outreach creates an additional touchpoint with participants, helping plans maintain accurate records while reinforcing awareness and engagement with retirees and their families.
A simple annual proof-of-life campaign can help reduce overpayments, strengthen fiduciary controls, improve retiree engagement, and protect plan assets. In today’s environment, proactive verification is one of the most effective and cost-efficient risk management tools available to pension plans.
Ready to strengthen your pension plan’s safeguards? MarketSphere’s Retirement Reunification Services can help you establish an annual proof-of-life campaign that reduces overpayment risk, supports fiduciary best practices, and keeps participant information current. Contact us today to learn how a proactive verification process can help protect your plan, its assets, and its retirees.
Attending the International Foundation of Employee Benefit Plans (IFEBP) conference in New Orleans, Oct. 25–28? Stop by Booth 218 to meet Jason Sauer and David Valducci and learn more about MarketSphere’s services. For more than 25 years, MarketSphere has helped organizations connect with members, employees, retirees, and other key audiences, achieving average response rates of 70%–80%. While you’re there, pick up some great giveaways and enter for a chance to win a 34-inch Samsung curved computer monitor – we’ll even ship it directly to you. We hope to see you there!
*Content contained in this article is considered accurate as of the publish date.
Jason Sauer
Jason has more than 18 years of experience working with ERISA protected assets, participants accounts, and plan data within all types of retirement plans. He has helped Plans and their intermediaries fulfill their fiduciary responsibility and stay in compliance with DOL, PBGC and IRS guidelines.
Charlie Kammerer
Charlie has over a decade of experience advising employers on retirement plan operations, governance, and long-term plan design strategies. He is particularly passionate about leveraging his communications background to help plan sponsors...
