More than 29 million forgotten or left-behind retirement accounts hold approximately $1.65 trillion in assets. The workers and families who own these funds often have no idea they exist, because they have changed jobs or their former employer has gone out of business.
Although state unclaimed property programs already work to reunite individuals with financial assets, such as the contents of a safe deposit box or utility reimbursements, regulatory ambiguity allows thousands of accounts to go unclaimed.
“Retirement benefits belong to the Americans who worked hard to earn them, not the large financial institutions who service them,” said Rep. Seth Magaziner, D-R.I. “As the former state treasurer of Rhode Island, I know that Rhode Island’s unclaimed property division works tirelessly to reunite individuals with their missing property and can do the same for missing retirement checks. Everyone deserves to retire with dignity and financial security.”
Magaziner and Rep. Ron Estes, R-Kan., also a former state treasurer, have introduced the Unclaimed Retirement Rescue Plan (H.R. 5325), which would help individuals reclaim lost retirement funds by allowing the transfer of unclaimed distributions to state unclaimed property programs. Among the key provisions of the bill:
- Transfer of funds. The bill allows retirement plan fiduciaries to voluntarily transfer unclaimed distributions to state programs, which will help streamline the process of reclaiming lost assets.
- Department of Labor involvement. The legislation directs the Labor Department to create regulations that support these transfers and to maintain a database to help individuals locate their lost retirement funds.
- Reporting requirements. States will be required to regularly update the Department of Labor’s Retirement Savings Lost and Found database, making it easier for individuals to track and recover their funds.
Since as early as the 1950s, states have enacted unclaimed property laws that required corporations, businesses, associations, financial institutions and insurance companies to report and turn over unclaimed assets. Today, all 50 states, as well as the District of Columbia, Guam, Puerto Rico and the Virgin Islands, have laws that designate state treasurers or other state administrators as the custodians of unclaimed property.
“We applaud the leadership of House members on this bipartisan issue,” said Michael Frerichs, Illinois state treasurer and president of the National Association of State Treasurers “Billions of dollars of hard-earned retirement funds remain disconnected from their rightful owners. State unclaimed property programs have a proven track record of returning many types of property and stand ready to do the same with retirement funds.”
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