When it comes to locating missing plan participants, electronic searches or “e-searches” are an indispensable tool. While it’s been proven that e-searches can be highly effective, inevitably situations will arise where plan sponsors must do something more, and that typically involves performing a more intensive search, where additional search resources are applied to improve the quality of the search, over and above what an e-Search can deliver.
More-intensive participant searches can increase the quality of search results, but by how much?
As it turns out, quite a bit. Our analysis of intensive searches revealed significant improvements in search quality across the board. Drilling down a bit, we also found improvements in identifying deaths, identifying unresponsive participants, and in achieving the “gold standard” of search results – where the searched-for party is contacted and directly verifies the result.
A “Low Confidence” Population of Participants
To perform our analysis, we examined the results of 6,985 discrete intensive searches performed by Retirement Clearinghouse (RCH) for six large corporate clients. In general, these searches were for participants whose going-in information quality could be characterized as “low confidence” – meaning that they had a much greater likelihood of:
- Having experienced returned mail
- Being deceased
- Being unresponsive
- Having an invalid mailing address or no address at all
Additionally, most of the searches were for defined benefit plan participants, where there are significant penalties and financial risks associated with the plan continuing to pay out pension benefits to deceased individuals, resulting in a direct loss of plan funds, which could translate into additional funding costs for the plan sponsor.
The Intensive Search Process
An intensive search is an end-to-end process that is kicked off by first performing an e-Search.
The intensive search that follows the preliminary e-Search includes the following steps:
- Mailing of up to 5 letters to participants or close relatives via USPS, which offer inbound participant verification via Interactive Voice Response (IVR), a call center and a secure website
- If optional outbound participant calling is selected, up to two outbound calls are attempted, to either a search-derived or a plan-provided phone number
- Accessing up to 5 additional, commercial databases by a qualified search specialist
- Searching social media for participants for whom no result is found
- Following the conclusion of the intensive search, a search team manager reviews and approves the results, and makes the reports available to clients.
What We Found
Our population of 6,985 searches included 14 discrete search batches, where 11 batches (representing 2,914 searches, or 41.7% of total) included optional outbound calling, while 3 batches (representing 4,071 searches, or 58.3%) did not require outbound calling.
We compared the results of these intensive searches against preliminary e-Searches that were performed prior to the intensive searches and assessed the overall changes in search quality, relying upon a set of 12 standardized “result codes” that are produced at both stages of the search process.
Examining the search result codes before and after an intensive search yielded the following key results.
1 - Provision of “Successful” Result Codes Increased:
Our analysis found that, across all search batches, the provision of a “successful” result code increased from 84.8% under a preliminary e-Search, to 89.3% under an intensive search. While these results are reflective of the “low confidence” nature of the participant data, they do indicate that, at a gross level, the intensive search casts a wider net, and in so doing, obtains more results.
2 – Around 1 in 6 Search Results Were Verified:
Following an intensive search, 1,049 searches, or around 1 in 6 searches, were directly verified by the searched-for party. This verification is made possible by the outbound communication efforts performed during an intensive search, and these results are particularly valuable, since they represent the “gold standard” of search results, and are not possible with an e-Search alone.
3 – Life Status Information Improved Dramatically:
An intensive search, when paired with participant outreach, produced dramatic improvements in the data associated with deceased participants:
- More Deaths Were Identified: In the subsequent intensive search, there were 24 additional deaths that were reported, or an increase of 1.8%. While this may sound like a modest number, consider that “missed deaths” can incur significant potential costs for defined benefit plans.
- More Relative Data Was Secured: For total deaths, an additional 130, or 12.4% more of the searches yielded additional information for deceased individuals’ relatives.
- More Relative Data Was Verified: For total deaths, 258, or 22.0% were “verified” -- meaning that a close relative personally verified the death as well as their name & address.
4 – A Large Number of Unresponsive Participants Were Verified:
Searches bearing the specific result code “Submitted Address Found” can often be a strong indication of unresponsive participants.
- In our results, of the 1,760 participants with this result code, 369, or 21.0%, were positively verified as residing at the same address as submitted, essentially confirming that they had been previously unresponsive.
Increasing Search Intensity Adds Value
Based on our analysis, there’s no question that intensive searches can increase the quality of search results for low-confidence populations of participants, over and above what can be reasonably obtained from a high-quality electronic search. For these problem records, increasing the search intensity and documenting the result could provide the necessary insurance during a plan audit.