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Unclaimed Property Focus
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UNCLAIMED PROPERTY FOCUS is a blog written by and for UPPO members, featuring diverse perspectives and insights from unclaimed property practitioners across the U.S. and Canada. We welcome your submissions to Unclaimed Property Focus. Please contact Tim Dressen via tim@uppo.org with any questions about submitting a blog post for consideration and refer to our editorial guidelines when writing your blog post. Disclaimer: Information and/or comments to this blog is not intended as a substitute for legal advice on compliance or reporting requirements.

 

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Catching “UP” on Canada

Posted By Will King, UPPO member, Thursday, November 14, 2013
Updated: Thursday, November 14, 2013

The passage of unclaimed property laws in countries across the globe is a trend that continues to gain momentum. In staying on top of these trends, holders and practitioners are monitoring a series of changes happening just north of our border in Canada.

Unclaimed property initiatives in the Canadian provinces mirror their U.S. neighbors in many respects. Significantly, in 2003, the Uniform Law Conference of Canada (ULCC) developed a Uniform Unclaimed Intangible Property Act (UUIPA). Much like the U.S.’s unclaimed property jurisdiction rules, under the UUIPA, an enacting province or territory would be entitled to receive unclaimed intangible property if the property belongs to an owner whose last known address as shown on the holder’s records is in that province or territory.[1] Also similar to U.S. statutes, the UUIPA contained provisions that include an owner notification process by holders, the requirement to remit property after a statutorily defined period of time, and establishment of a public registry of unclaimed property. Still, the status of unclaimed property laws in each province is different. An update on four key provincial unclaimed property laws (or efforts to enact such a law) is provided below.

Ontario
In 1989, Ontario passed the Unclaimed Intangible Property Act, however at the time, the statute was not proclaimed in force. In 2012, the Ontario budget announced the government’s intention to create an unclaimed property scheme that mirrors that of the United States. Under the proposed plan, intangible property currently lying unclaimed in institutions in Ontario is to be remitted to the Ontario government where an owner may claim it, and where it is to be used to the benefit of Ontarians until such time as it is claimed. The property intended to be included in the program includes amounts due under insurance policies, unpaid wages and interests recognized by share certificates and bonds, as well as other property types.

Using the UUIPA as the basis of discussion, in June 2013 the Ontario Ministry of the Attorney General (OMAG) held a series of roundtable stakeholders meetings in Toronto. The meetings were held in order for stakeholders to express their opinions related to the new law. In addition, Ontario sought its second round of written comments from stakeholders which were due back on Sept. 18.

A summary of the stakeholders meetings issued by the OMAG revealed that – perhaps not surprisingly - consumers were very interested in the creation of a program encompassing as much unclaimed property as possible, similar to programs in the United States and Alberta (discussed further below). Further, in their summary the OMAG indicated holders were concerned about a new law creating undue burdens on them, particularly the cost burden of having to deal with low value property, that the law’s application not be retroactive in nature, and that dormancy periods be uniform among the provinces. You can find out more about the proposed Ontario unclaimed property law by visiting: http://www.attorneygeneral.jus.gov.on.ca/english/about/uipp_consultation.asp

It is possible that a form of the UUIPA may ultimately become Ontario law. If so, it’s scope could be quite broad. Consider that, the UUIPA applies to credit balances, shares, cash, bonds, amounts due and payable under insurance policies, trust funds, distributions from retirement or pension plans, gift certificates, etc. The dormancy periods are generally three or five years depending upon the property type. Under the UUIPA , due diligence mailings are required for property valued at $100 or greater but is not required for items the holder has reasonable grounds to believe that the correct address of the owner cannot be reasonably ascertained. Within four months from the end of the calendar year, a holder is required to report and remit unclaimed property.


For more about the UUIPA visit: http://www.ulcc.ca/en/uniform-acts-en-gb-1/545-unclaimed-intangible-property-act/1114-unclaimed-intangible-property-act

Quebec
A comprehensive unclaimed property program has existed in Quebec since 1997. Additionally, Quebec has incorporated many aspects of the UUIPA into its unclaimed property law and places requirements on financial institutions, insurance companies, trust companies, mutual fund and other investment dealers, credit unions, pension plans, and more. Specifically, Quebec’s unclaimed property requirements apply to financial assets, property of successions, property of dissolved businesses, property without an owner and property located in Quebec whose owner is unknown or untraceable. Like the UUIPA (and in the U.S.), jurisdiction is based on the last known address of the owner.

The dormancy period for most of the property types covered by Quebec’s unclaimed property law is three years. If the value of the property is $100 or more, the holder is required to conduct a reasonable search to locate the rightful holder and notify him or her in writing about the property and how to claim it. Property that remains unclaimed must be reported to the Revenu’ Quebec three months after the end of the fiscal period during which the asset became unclaimed.

More information about Quebec’s unclaimed property law can be found at: http://www.revenuquebec.ca/en/bnr/pfnr/detenteur/procedure_instit.aspx

Alberta
On Sept. 1, 2008, Alberta’s Unclaimed Personal Property and Vested Property Act (UPPVPA) went into effect. Like many U.S. laws, the UPPVPA specifically excludes gift certificates, retail business credits, and certain other property from its scope. However, it does apply to uncashed checks (including payroll), accounts receivable credits, refunds, bonds, shares, amounts due and payable under insurance policies, retirement and pension fund distributions, etc. While the law as written applies to securities, a pending review by the Alberta Treasury Board and Ministry of Finance (ATBF) of the application of the Act to securities property has delayed application of the law to this property type.

Similar to the laws in the United States, the Alberta UPPVPA requires the delivery of notice to the owner at the owner’s last known address in the books and records of the holder. However, the Alberta law does not require due diligence be performed when the holder knows the address to be invalid although such information must be included in the unclaimed property report.

Reports and remittance are due with 120 days after Dec. 31 and Alberta requests reports be delivered via their online website portal at: https://tracs.finance.gov.ab.ca/publicTracs/submitUnclaimedProperty.do?event=init


For more about the Alberta UPPVPA and compliance requirements go to: http://www.finance.alberta.ca/business/unclaimed_property/info_property_holders.html

British Columbia

Quite different from the Alberta unclaimed property laws and those of most U.S. states, the British Columbia unclaimed property law and regulations apply narrowly to certain types of property valued at specified dollar thresholds. Unlike state unclaimed property laws and the Alberta law, uncashed vendor checks and outstanding wages and payroll items are not covered by British Columbia's Unclaimed Property Act (the BC Act).

Note however, that the BC Act does apply to outstanding items that may be held by insurance companies. More specifically, amounts of $200 or greater which are due and payable by an insurer under the terms of an insurance policy, such as premium refunds - which are not due under a life insurance policy, annuity, endowment policy or a variable insurance contract - are covered under the BC Act and carry a three year dormancy period. Amounts due and payable by an insurer under a life insurance policy, an annuity, an endowment policy or a variable insurance contract relating to segregated funds, and which are $1,000 or greater, have a three-year dormancy period. In addition, money deposits of $200 or greater that are not deposits in a savings association or a deposit for an insurance premium, are covered property, but only if there is a right to receive a cash refund of the deposit. These deposits carry a three year dormancy period. Other types of property are covered under the BC Act as well if they meet particular dollar thresholds, such as money orders, securities, and trust and retirement plan distributions.

Under the BC Act, businesses that hold covered property are required to make reasonable efforts to locate the owner and to notify them of the property within six months from the end of the dormancy period. If the owner cannot be located and notified within 12 months of the dormancy period, the property is considered unclaimed. Once property is considered unclaimed, a business must consider whether reporting and remitting it to the British Columbia Society (BCS) is mandatory or voluntary and, if it is voluntary, what its obligations are if it does not report and remit. Under the BC Act, the following businesses must report and remit property that is deemed unclaimed: credit unions, debt collection agencies, real estate agencies, and companies in liquidation.

Businesses for which reporting and remitting property is voluntary, have the option of reporting and remitting property to the BCS or retaining the property and doing the following:

  1. Publishing designated information about the property and owner in a publicly-accessible database as specified in the BC Act, and
  2. Establishing and maintaining an information line or other point of contact for owners inquiring about unclaimed property, and
  3. Making available to the public, information about whom to contact and how to make a claim, and
  4. Establishing and following procedures for reviewing and processing claims, including a process for appeal of a decision to deny a claim.

For more information about the BC unclaimed property requirements visit:

http://www.unclaimedpropertybc.ca/submit.php

Many unclaimed property holders already face the daunting task of staying informed of legislative and regulatory changes in the United States year after year. Now, with the emergence of a Canadian unclaimed property scheme, holder compliance efforts will accordingly increase in complexity. However, it’s imperative to stay on top of these changes so appropriate and timely compliance program adjustments and determinations can be made.

About the author: Will King is the Associate General Counsel and a vice president at Unclaimed Property Recovery & Reporting (UPRR). If you have questions for Will you can contact him at wking@uprrinc.com or 857.444.6004.



[1] The commentators to the UUIPA believe that this is "the fairest, clearest, and most practical basis for determining the jurisdiction to which unclaimed intangible property should be reported and transferred.”


More Resources
Overview of Ontario’s Unclaimed Property Law Feedback

Tags:  Alberta  British Columbia  Canada  Ontario  Quebec  reform  unclaimed property 

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Did you know $4,000 is up for grabs?

Posted By Administration, Thursday, November 7, 2013
Updated: Thursday, November 7, 2013

As a trade association, UPPO is committed to the continued education of unclaimed property professionals and their dependents. Because of your loyal support of UPPO, a scholarship fund was created to support you and your family with the costs of undergraduate, graduate and vocational education.

One person will be awarded the $1,000 renewable scholarship for 2014. If awarded the scholarship you can renew it annually up to three times, to receive a maximum of $4,000. Applications are currently being accepted for the 2014 UPPO Scholarship. If you or your dependent is interested, make sure the completed application is post-marked by Dec. 31, 2013.

To learn more about the scholarship rules or to start your application click here! Please direct all questions regarding the scholarship to Scholarship Management Services at 507-931-1682.

More Resources
Join UPPO, to become eligible for the UPPO Scholarship

Tags:  education  scholarship  unclaimed property  UPPO 

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Five Bucks for a Few Minutes – UPPO Membership Survey

Posted By Emily Lee, UPPO, Friday, November 1, 2013
Updated: Friday, November 1, 2013

UPPO is asking all members to take five to seven minutes to take the 2013 membership survey. To serve members better we need to understand members’ professional needs and what they want to gain from membership.

To thank you for your time and input, we are offering all UPPO members who complete the survey a thank you gift.

If you have questions about the survey, please contact Jackie Cote, association manager at 508-883-9065 or jackie@uppo.org.


More Resources

Are you an unclaimed property professional? Join UPPO today to jump-start your career.

Tags:  membership  membership survey  unclaimed property  uppo 

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Holder Responsibility Part IV: Record Retention Nightmares

Posted By Dana Terry, UPPO 2nd vice president and member , Wednesday, October 30, 2013
Updated: Wednesday, October 30, 2013

Throughout October, we’ll be posting a series on the four tenants of holder responsibilities – reviewing records, due diligence, reporting and remitting and retaining records.

Part IV

Are you keeping your unclaimed property records for the appropriate amount of time? What is the appropriate length of time? And exactly what records should you keep? Do questions like these keep you up at night? If so, it may be time to review your company’s record retention policy.

The 1995 Uniform Unclaimed Property Act states: "A holder required to file a report under section 18, as to any property for which it has obtained the last known address of the owner, shall maintain a record of the name and last known address of the owner for 10 years, or, for the holder of records of transactions between 2 or more associations as defined under section 37(a)(2), for 5 years, after the property becomes reportable, except to the extent that a shorter time is provided in subsection (2) or by rule of the administrator.” (567.252 Section 32 (1))

In practice, this is best translated to a retention period of 10 years plus the dormancy period of the property type you are reporting. All states are different but many holders have reported some state auditors have looked back as many as 20 years during an audit. Many states don’t include record retention periods in their statute of limitations but instead require record retention periods longer than their tax statutes!

When looking at various state retention requirements, I found that some states gave time frames from when the property was reported while others gave the time frames from when the property was reportable or filed. This makes it challenging to compare state record retention periods. I referenced the 1995 Uniform Act above as a standard but it is also important to note states do have a wide range in retention periods; some as low as three years (Hawaii and Oregon) and the majority as high as 10 years. But there are also a number of states with a range from four – seven years.

Here are a few unique cases

  • Minnesota, Mississippi, and Puerto Rico are silent on record retention.
  • Kentucky requires five years for property reported in the aggregate, and is silent for all other property.
  • Maryland’s statute indicates five years but its policy states eight years.

Now if that isn’t enough to scare you into having nightmares, keep in mind that state laws are often silent on which records to keep. Holders should consider which records are necessary to protect your company in an audit. Make sure all your record retention polices are clearly documented in your policies and procedures. And most importantly, make sure you are following your own policies to prevent an even bigger nightmare in the future!

Dana Terry is a senior regulatory compliance analyst at DST Systems, Inc. She also serves as the 2nd vice president and is a long-standing UPPO member. For questions, contact Dana at 816-843-8367.

More Resources

Keep an eye out for the release of the Introduction to Unclaimed Property webinar

To learn more about record retention and suggested practices attend the 2014 Annual Conference in March 2014!

The UPPO Buyer’s Guide lists UPPO members that provide services to assist or consult with record retention


Tags:  holder responsibility  record retention  unclaimed property  UPPO 

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Holder Responsibility Part III: Reporting and Remitting in a Timely Manner

Posted By Danielle Herring, UPPO member, Thursday, October 24, 2013
Updated: Thursday, October 24, 2013

Throughout October, we’ll be posting a series on the four tenants of holder responsibilities – reviewing records, due diligence, reporting and remitting and retaining records.

Part III

How can you ensure that your reports are delivered and the amount you owe is remitted in a timely manner? Here are some things to consider.

We all think of the report due date as the finish line, but where does one start? It all starts when property appears to have been abandoned by the owner. I won’t get into definitions of abandonment in this post, but you can find this information on states’ websites, from your unclaimed property software and service providers, and various other sources. At some point, you gather the information about the owner and their property, and begin to keep track of how much time has passed.

The states have different dormancy requirements for different types of property. This information can be found in the state reporting handbooks on each state’s website (there’s a handy list of state websites on the govWATCH website). Most property has to age three or five years. Some property types, such as payroll, have a shorter dormancy requirement of one or two years.

After the appropriate number of years goes by and the property has still not been claimed, your next step is to send out due diligence letters to try to locate the owners before their property is turned over to the states. It is important to send these letters out on time. Most states require the letters be sent at least 60 days before the report due date. If you get a late start on letters, this may delay your state reporting as you’ll want to give the owners a chance to respond to the letters.

When the appropriate amount of time has passed for owners to respond to the letters, you’ll want to generate your state reports. Most states require a signed coversheet as part of your report submission. You’ll need to factor in enough time to get the cover sheets signed by an officer of your company, get your remittance set to go to the states, and ship your reports and remittances to the states so they arrive on or before the due date.

Using unclaimed property reporting software makes this process much more efficient than if you were to track everything manually. Most state websites have links to free software providers you can use. These systems allow you to input your data, generate due diligence letters, and generate the NAUPA electronic files and cover sheets for submission.

The free services also include tables to show how long each type of property for each state must remain abandoned before it is reported, as well as information about how you can make your payment (physical check or ACH/EFT/wire payments). This is very helpful and will save you time as you won’t have to visit each state’s website and research this information on your own.

It is important to note that your report submission is not considered complete until the state has received your payment.

There is a free online portal, called UPExpress, where you can submit reports and cover sheets for 25 participating states. You can access it at https://upexpress.eagletm.com/.

Many states have their own online delivery methods listed on their websites. You can use these to upload your file to the state website and receive a receipt with payment information.

Some states still require the NAUPA file on a CD which you must physically mail to them. Make sure to allow enough time for shipment.

If you remember to gather your unclaimed property data regularly, send your due diligence letters on time, and use the most efficient method of delivery for report and payment, you will have everything completed in plenty of time.

Next week we’ll wrap up the series with Part IV: Retaining Records.

Danielle Herring is a UPExchange Product Manager at Eagle Technology Management. She is also a UPPO member and serves on the UPPO eLearning Committee and Introduction to Unclaimed Property Webinar Task Force. The free webinar will be released soon! For related questions you can contact Danielle at Danielle.Herring@byetm.com.

More Resources

The Buyer’s Guide is a useful tool to identify service-providers that can help your company

Tags:  remitting  reporting  service providers  unclaimed property  UP 101  UPPO 

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