UNCLAIMED PROPERTY 201

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Representing State Governments That Actively Find Owners While Protecting Forgotten Funds Until Claimed

UNCLAIMED PROPERTY

201

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2012 National Holder Workshop

DEFINITIONS

• Dormancy Period:

The period of time during which an owner of property does not take action on his property. The dormancy period is determined by the type of property and may vary from one to 15 years. • Dormancy Date:

The most recent date that the owner and the holder of the property made active contact with each other.

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PREVENTION

Actions that PREVENT abandonment:

• Account Activity such as a deposit or withdrawal

• Address Change notification

• Phone Contact with record made • Related Account Activity

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PREVENTION

Actions that DO NOT prevent abandonment:

• Automatic Drafts or Deposits • Posting of Interest

• Absence of Returned Mail • Service Charges

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DORMANCY TRIGGERS

Securities (95 Act)

• Dividend, stock split or other distribution not claimed

• Returned mail (RPO) the second time

• Holder discontinued mailings, notifications or communications to the apparent owner

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DORMANCY TRIGGERS

Banks & CDs

• CDs – Initial (or first) date of maturity;

unless consent to renew is in writing or evidence by a memo on file with holder

• The 81 Act - Property isn’t abandoned if: - Owner “owned other property” with

qualifying activity

- The financial organization communicates with the owner about the inactive account at the address of the active account

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DORMANCY TRIGGERS

Tax Shelter Accounts

81 Act: “Intangible personal property held in a fiduciary capacity”

• The time period it becomes payable or distributable unless the owner:

- Increases or decreases the principal, or

- Accepts payment of principal or income, or - Communicates concerning the property, or - Indicates an interest in writing

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DORMANCY TRIGGERS

95 Act: “Any property in an IRA, defined benefit plan or…plan that is qualified for tax deferral…”

• The time period after earliest of the date of distribution, attempted distribution or death • Date of the required distribution as stated in

the plan or trust agreement

• Date specified in US income tax laws where distribution must begin in order to avoid a

tax penalty

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RESOURCES

• Dormancy periods can be found on the QRP @ www.unclaimed.org

To Find:

Reporting Resources Tab then;

QRP States Monitoring Services then; Dormancy Period

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UNCLAIMED PROPERTY

201

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Due Diligence

• When certain conditions are met Holders are required to provide unclaimed property owners with notice and provide them with an opportunity to prevent the property from becoming abandoned.

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UNCLAIMED PROPERTY

201

VOLUNTARY COMPLIANCE PROGRAMS

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Voluntary Compliance Program Defined

• A program whereby holders can receive certain benefits by proactively reporting and remitting prior unclaimed property liabilities.

• Most states offer some form of a voluntary compliance program to encourage holders to comply with their unclaimed property law.

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Types of Voluntary Compliance Programs

• Formal Programs

– Voluntary Disclosure Agreement (VDA) – Compliance Disclosure Agreement (CDA)

• Informal Programs

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Requirements/Terms

• Qualifications to Participate

– Holder is not currently under audit or notified of audit by the state.

– Holder has no previous reports filed.

– Some states allow previous report filers to participate on an individual basis.

• Disclosure of Holder Information • Contractual Agreement

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Formal Agreement General Requirements/ Terms Cont’d

• Holder Performs Self-Audit • Specified Look-Back Period

• Abatement of Penalties and/or Interest

• Holder Submits Unclaimed Property Report and Remittance

• Property Not Accepted on Behalf of Other States • Annually File UP Report

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Informal Programs General Requirements

• Requirements Vary Among States

– First time filers not charged penalty/interest. – Some states offer for previous filers.

– Holder should contact state for information to provide. – Reporting period varies.

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Unclaimed Property 201

COMPLIANCE-RELATED TRENDS IN UNCLAIMED

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Dormancy Reduction

• Over 20 amendments in last five years. • Increased UP awareness among state

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Uniformity/Standardization?

• Increased discussions in Holder

community and among UP administrators. • No centralized law and there are a number

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More Rigid Enforcement?

• Increased number of states may elect to enforce fee and penalty provisions.

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Technology Will Result in Changes

• What constitutes customer contact? • New categories of property.

• Increased UP compliance responsibility for small businesses.

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