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ERISA Advisory Council Plans Review of Unclaimed Property Practices

Posted By Administration, Thursday, June 13, 2019

The Advisory Council on Employee Welfare and Pension Benefit Plans recently announced it will study permissive transfers of uncashed checks from ERISA plans to state unclaimed property funds. Also known as the ERISA Advisory Council, the group’s purpose is to provide recommendations to the Department of Labor on matters related to Employee Retirement Income Security Act.

 

Many employee benefit plans have been established under ERISA. A common position for companies to take is that because federal law dictates how benefit plans should be administered under ERISA, states are preempted from claiming the money associated with those plans. 

 

Announcing its plans to study the issue, the advisory council wrote, “The department has consistently applied a broad view of ERISA preemption of state unclaimed property and escheat laws. However, that guidance does not limit the extent to which a plan representative may voluntarily transfer uncashed checks to a state unclaimed property fund. The 2019 Council’s objective is to review the treatment and procedures utilized by state unclaimed property funds, which may vary significantly between states.”

 

The council does not plan to address what steps are appropriate to locate missing plan participants. Rather, it intends to explore whether circumstances exist in which voluntary transfers of uncashed distribution checks to a state unclaimed property fund advances the Department of Labor’s goal of reuniting missing participants with their retirement savings. 

 

The ERISA Advisory Council is scheduled to take up this issue during its next meeting, scheduled for June 25-27, 2019. The council will accept public comments through June 18. 

 

 

 

 

Tags:  employee benefits  ERISA  retirement accounts 

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