Keane's Unclaimed Property Blog

Further Scrutiny From Above? More Eyes on Retirement Savings Plans as the Advisory Council to the DOL Prepares to Review Uncashed Checks from ERISA Plans

The 2019 Advisory Council on Employee Welfare and Pension Benefit Plans, which supports and advises the Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA), will soon be reviewing the procedures used by the states to determine whether the voluntary transfer of uncashed distribution checks to the states’ unclaimed property funds is advancing the DOL’s goal of reuniting missing participants with their unclaimed retirement funds.

According to the Council, once a plan representative has “exhausted reasonable efforts” to locate missing or unresponsive plan participants and beneficiaries, the plan has the following options with respect to the uncashed checks:

  • rollover to an IRA or annuity;
  • forfeiture with the right of restoration;
  • transfer to a federally insured benefit account; or
  • voluntary distribution to a state unclaimed property fund.

Despite the DOL’s broad application of ERISA preemption, the Council notes that federal preemption does not reach to the uncashed checks, and if the participant or beneficiary cannot be found, the uncashed checks “ultimately result in [the] transfer to a state unclaimed property fund.”

Link to Council’s Statement:

Unclaimed Property

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