Spring Retrospective and Flash Forward to Fall
By Joe Pollock, Director Compliance Services & Steve Ward, Enterprise Account Executive
September 4, 2020
September 4, 2020
I think it’s safe to say that 2020 has been a year that nobody will soon forget. The COVID-19 pandemic has impacted all aspects of life and business. It’s been a challenging year for all of us, and everyone has faced their own unique struggles. Yet, life certainly does not wait for a pandemic to pass.
We feel it would be appropriate to evaluate the impact COVID-19 has had on Sovos Keane, our clients and the unclaimed property industry. The entire reporting team began working remotely on March 23rd. Prior to the pandemic, staff members were working from home which was a great dress rehearsal for a full 5-day work week at home. The impact on unclaimed property has been very significant. Many state unclaimed property offices also had to adjust their work schedules right in the middle of the Spring filing period. As states enacted stay-at-home orders for their citizens, unclaimed property offices soon followed suit. Several states reacted quickly, and updated their extension policies in response to COVID-19. The adjustments varied from the blanket extension in Pennsylvania, or California, to the more common, “submit a request for a 30-60 day extension” in others. During a non-pandemic filing cycle, Sovos Keane will typically file extensions for less than 2% of our clients. During the Spring 2020 reporting cycle we filed extensions for 25% of our clients. As a courtesy to our customers during these trying times we waived all fees associated with filing extensions in the Spring. For the California Remittance in June, the number of extensions increased to 27%. The increase certainly speaks volumes to the impact of COVID-19 in our niche of the world. We’ve even seen some states having issues locating items sent to them, requesting files be re-sent and being back-logged much more than usual. We will continue to provide updates via our COVID-19 Resources Page as Fall reporting states provide guidance.
Additionally, the U.S. Postal Service has temporarily suspended service to a long list of countries. The list of countries with international mail suspensions has decreased since the Spring but is still significant. Unclaimed foreign property is due to the state of incorporation. Slightly over 50% of our clients are incorporated in Delaware, and their letters are not due to be mailed until December 2020. However, the remainder are primarily located in Fall-reporting states.
Lastly, as many states have felt the impact of COVID-19 in their economies, they will be looking to make up funding from other areas. Now, more than ever, states will be vigilant in ensuring unclaimed property compliance with all companies, especially those incorporated in their state. One of the many benefits of being a client is ensuring your compliance as well as lightening the load at your organization for handling the escheatment process.