how does plan sponsor show they have made effort to find person;and what do they do with monies?

What does the plan document say? Usually it says to take reasonable steps to locate the participant; it may even mention using the SSA to find them.

Document in writing every step in your search. Contacts, e-mails, letters, phone numbers, responses, follow-ups, etc.

As BG5150 pointed out, the SSA may be able to help, as can the IRS:

http://benefitslink.com/boards/index.php?s...ng+participants

As for what happens to the money: I think (read: I'm not really sure at all), if the document allows it, the funds can be escheated to the sate in limited circumsatances. I think (see caveat in previous sentence) it's the absolute last resort, though, after all other altenatives have been exhausted.

Don't forget about direct rollover provisions, under $5K.