Unclaimed Retirement Rescue Plan
The Unclaimed Retirement Rescue Plan would require the Secretary of Labor to issue a regulation that lets administrators of certain pension plans voluntarily transfer unclaimed retirement distributions to State unclaimed property programs. The transfers would go through a national clearinghouse—the State Unclaimed Retirement Clearing House—that coordinates exchanges across state programs. Before transferring, plan fiduciaries must attempt to locate the participant’s current contact information and send a notice explaining the distribution is about to be transferred unless the participant responds. The bill also sets reporting requirements to the Department of Labor, requires data sharing to verify whether a transfer has been claimed, and places the transfers within existing ERISA rules for fiduciaries and qualified trusts. It aims to increase the recovery of unclaimed assets by moving them to state programs while preserving protections for plan administrators and participants.
Key Points
- 1Regulation to enable voluntary transfers: The Secretary of Labor must promulgate a regulation within 180 days that allows plan administrators and other fiduciaries to transfer unclaimed retirement distributions to State unclaimed property programs via the State Unclaimed Retirement Clearing House.
- 2Transfer mechanism and scope: Transfers would be voluntary and use the national clearinghouse to move funds to state unclaimed property programs. The process is designed to coordinate across states and align with existing state escheatment structures.
- 3Prerequisites and notice requirements: For distributions of $50 or more, plans must (where not already done) try to identify the current contact information using informational databases and outside sources, and send a notice to the participant explaining the transfer timeline and providing instructions to prevent the transfer. The form of notice must be reasonably likely to reach the participant and protect privacy; mailing is not required if the search yields no updated contact info.
- 4Reporting, data sharing, and retirement savings database: Plan fiduciaries must submit periodic reports to the Secretary with details about transfers (including identifying information for unclaimed distributions that remain unreported or have been claimed). Reports are confidential and must be included in the Retirement Savings Lost and Found Database. The Department must provide a mechanism to verify whether a transferred distribution has been claimed.
- 5Fiduciary protections and regulatory compatibility: Transfers meeting the Act’s requirements would be treated as satisfying certain ERISA provisions (e.g., sections 404(a) and 406) for those transfers. The plan’s trust status must not be jeopardized, and data sharing must be done with reasonable care. The bill also requires a Congressional report within 24 months after the regulation is promulgated on progress and possible improvements.