Kelly Broadway, 202.627.1918, email@example.com
For Immediate Release
ERIC Testifies About Uncashed Retirement Checks
Aliya Robinson testifies before the ERISA Advisory Council
Washington, DC – The ERISA Industry Committee (ERIC) today testified before the U.S. Department of Labor’s Advisory Council on Employee Welfare and Pension Benefit Plans (ERISA Advisory Council) on permissive transfers of uncashed checks from ERISA plans to state unclaimed property funds.
Aliya Robinson, Senior Vice President of Retirement and Compensation Policy, testified on behalf of ERIC and its large employer members on the legal and practical concerns surrounding uncashed checks and state escheatment – the process of turning over custody of abandoned assets or accounts to a state authority. Legally, guidance indicates that state escheatment laws are preempted by the Employee Retirement Income Security Act (ERISA), without a distinction between required and permissive transfers. From a practical perspective, there is concern about the burden of complying with the escheatment laws of 50 different states.
Robinson testified, “Since most plan sponsors are advised not to transfer checks to state unclaimed property funds, they must rely instead on other procedures. Unfortunately, there is not much guidance from the federal government in this area for plan sponsors and they are left on their own to determine how best to meet their obligations under ERISA.”
As such, ERIC asked that the Council advise the DOL to provide guidance in this area to clarify plan sponsor obligations. Robison laid out the following possible solutions to the issue:
- Allow a plan sponsor to choose one state to which to make all voluntary transfers
- Allow voluntary transfers to a central repository or to a federal agency
“Any of these options could provide a clear, consistent, and streamlined process that would help plan sponsors fulfill their fiduciary obligations and make it easier to beneficiaries and their families to find amounts that are due to them,” said Robinson.
In addition, because the uncashed check issue arises in missing participant audits, ERIC requested that the DOL refrain from asserting any findings of fiduciary breach related to uncashed check issues until it provides clarifying guidance on procedural steps for finding missing participants.
About the ERISA Industry Committee
The ERISA Industry Committee (ERIC) is the only national association that advocates exclusively for large employers on health, retirement, and compensation public policies at the state, federal, and local levels. Learn more at eric.org.