This year a few of my younger clients had something nearly identical happen to them (legitimately, this happened to three different people) and I want to advise them all correctly:
1. They left jobs in 2017 or 2018. They had very small 401Ks through those jobs.
2. Apparently, those 401K accounts were closed (ie "forfeited") without their direct knowledge. (I think because the accounts were probably too small? Or perhaps because the terms of their employment or 401K called for it to terminate upon termination of their employment? I'm not sure).
3. They were apparently issued a check for the balance of the account.
4. They never received those checks.
5. They found out about this because, earlier in 2019, they received 1099-Rs, with code 1.
6. In the case of the 2 of them, taxes were withheld on the distribution (which is of course not something I'd advise, because ideally this would be a rollover, for which taxes shouldn't be withheld.)
Each of the 401K custodians has been remarkably unhelpful, but they each have some variant of a process where you can submit a claim that they never received their distribution check.
What doesn't add up is they received 1099-Rs, but not the checks. So it's not as if the 401K custodian banks don't have their correct address on file.
In any event, I'm not sure what the correct plan of action should be for such individuals, when it comes to filling out their taxes. Do they report the distribution and the taxes withheld on their tax returns? They may not end up getting the checks re-issued until later this year, if all goes well with the various claims processes.