Unclaimed Retirement Rescue Plan
Unclaimed Retirement Rescue Plan would require the Secretary of Labor to issue a regulation letting administrators of certain pension plans voluntarily transfer unclaimed retirement distributions to State unclaimed property programs, coordinated through the State Unclaimed Retirement Clearing House. The intended effect is to move dormant retirement funds back to actual owners or their heirs through state escheat programs, while creating safeguards to protect participants’ information and maintain ERISA compliance. The bill sets notice and contact-search requirements, allows transfers for distributions at or above $50, and provides a safe harbor from certain ERISA rules, along with ongoing reporting and data-sharing provisions to track and verify transfers and claims. Key elements include a 180-day deadline to issue the regulation, a process to locate current contact information and send notices before transferring, a secure method of notification, reporting every 90 days, and inclusion of data in the Retirement Savings Lost and Found database. It also provides privacy protections, allows the Secretary to publish a progress report to Congress within two years, and permits the Secretary to raise the existing $5,000 maximum in certain cases.
Key Points
- 1Regulation to allow voluntary transfers: The Secretary of Labor must promulgate a regulation within 180 days that enables plan administrators and other fiduciaries to transfer unclaimed retirement distributions to State unclaimed property programs via the State Unclaimed Retirement Clearing House.
- 2Prerequisites and notice for transfers: For unclaimed distributions of $50 or more, plans must (a) try to identify updated contact information and (b) send a notice to the participant or beneficiary explaining the pending transfer and how to prevent it, with notices delivered in a secure manner. Notices are not required if no updated contact info is found after searches.
- 3ERISA safe harbor for transfers: Transfers made under this process would be deemed to satisfy ERISA 404(a) and 406, providing a safe harbor for the plan administrator or fiduciary in connection with the transfer to a state program.
- 4Information sharing and transparency: The Secretary must provide a way for plan administrators to verify whether a transferred distribution has been claimed, and requires quarterly reporting detailing transfers (including identifying information, amounts, and the transferring plan) and whether transfers have been claimed.
- 5Data and privacy protections; long-term reporting: Reports are not publicly disclosed and must be included in the Retirement Savings Lost and Found Database. The bill also requires a congressional report within 24 months of the regulation’s promulgation on progress, effectiveness, and possible improvements.