Unclaimed Retirement Rescue Plan

Summary#

This bill directs the Secretary of Labor to write a regulation that lets administrators of certain pension plans voluntarily transfer unclaimed retirement distributions to State unclaimed property programs. Transfers would be done through a national Unclaimed Retirement Clearing House run by the States. The rule must be issued within 180 days of enactment.

The bill sets steps plan administrators must take before transferring funds worth $50 or more. Those steps include searching informational and outside databases for updated contact information and sending a secure notice to the participant or beneficiary explaining the planned transfer and how to stop it. Notice is not required if the search finds no updated contact information. The bill defines what counts as an unclaimed retirement distribution: for terminating plans, distributions not cashed within 90 days; for other plans, unpaid amounts not claimed for 12 months and not over $5,000 (the Secretary may raise that limit).

The bill provides fiduciary relief: administrators who follow the rules and regulations are treated as meeting ERISA sections 404(a) and 406 for the transfers. Plans may transmit participant data to State programs through the national clearinghouse if they use reasonable care. The Secretary must provide a way for plans to check whether a transferred distribution has been claimed and must add transfer information to the Retirement Savings Lost and Found Database. Fiduciaries must report transfers to the Secretary within 90 days of enactment and every 90 days after that. The Secretary must report to Congress on the regulation’s progress and effectiveness within 24 months of promulgation.

What it means for you#

• If you are a plan participant or beneficiary, administrators could move small, unclaimed pension payments to your State's unclaimed property program after searches and notice attempts.
• If you are a plan administrator or fiduciary, you may be allowed to transfer qualifying unclaimed distributions to State programs through a national clearinghouse if you follow the statute and the Labor Department regulation. That includes performing searches, sending secure notices when required, reporting to the Secretary, and exercising reasonable care when sending participant data.
• If a transferred amount is later claimed by a participant, the Secretary’s systems and the Lost and Found Database are to show that the distribution was claimed so plan records can be updated.

Expenses#

No publicly available information on federal costs or savings. The bill requires the Secretary of Labor to write a regulation and requires periodic reporting, but the text does not include cost estimates.

Proponents' View#

No publicly available information.

Opponents' View#

No publicly available information.