HR5325-119

What This Bill Does

The Unclaimed Retirement Rescue Plan creates a regulated path for pension plans to transfer unclaimed retirement distributions to state unclaimed property programs through the States' Unclaimed Retirement Clearing House. Within 180 days, the Labor Secretary must issue regulations allowing pension plan administrators and responsible fiduciaries to make those transfers. Before transferring unclaimed retirement distributions of $50 or more, plans must search informational databases and commercially reasonable outside sources for current addresses or other contact information when they have reason to believe existing contact information is inaccurate, and must send secure notice explaining the distribution, planned transfer to the state where the participant or beneficiary last resided, and how to prevent the transfer. If the required search finds no updated contact information, notice is not required. Fiduciaries that satisfy the statute and regulations are deemed to satisfy ERISA sections 404(a) and 406 for the transfer, receive a liability shield for transmitting participant data through the clearinghouse with reasonable care, and do not disqualify the plan trust under Internal Revenue Code section 401 merely by making a compliant transfer. Plans must report every 90 days to Labor with identifying information, transfer amounts, destination states, plan or fiduciary names, and claimed-transfer updates; the reports are not public under FOIA. Labor must include the information in the Retirement Savings Lost and Found Database, provide a way for plan administrators to verify whether transferred distributions have been claimed, and report to Congress 24 months after issuing the regulation. For nonterminating plans, unclaimed retirement distribution generally means a single unpaid obligation unclaimed for 12 months and not exceeding $5,000, with Labor discretion to increase the cap.

Who Benefits and How

Retirement plan participants benefit because unclaimed distributions move into state unclaimed property systems and the federal Lost and Found Database rather than remaining stranded with plans. Pension plan administrators benefit from a regulated transfer path and ERISA fiduciary safe harbor for compliant unclaimed distribution transfers. State unclaimed property programs benefit from nationally coordinated transfers through the States' Unclaimed Retirement Clearing House. Beneficiaries owed retirement distributions benefit from required address searches, secure notice, and database tracking for claimed transfers.

Who Bears the Burden and How

Department of Labor Employee Benefits Security Administration staff must issue regulations, receive quarterly reports, update the Lost and Found Database, and report to Congress. Plan fiduciaries must conduct contact searches, send secure notices, report transfers every 90 days, and protect participant personal information. State unclaimed property administrators must handle transferred retirement distributions and claimed-status information. Pension plan recordkeepers must build processes for clearinghouse transfers, data reporting, and participant search documentation.

Key Provisions

• Requires Labor regulations within 180 days allowing unclaimed retirement distribution transfers through a national clearinghouse.
• Requires contact searches and secure notices for unclaimed distributions of $50 or more before transfer.
• Provides ERISA fiduciary, prohibited-transaction, data-transmission, and qualified-trust safe harbors for compliant transfers.
• Requires quarterly nonpublic reports to Labor and inclusion in the Retirement Savings Lost and Found Database.
• Defines unclaimed retirement distributions, including nonterminated-plan unpaid obligations unclaimed for 12 months and not exceeding $5,000.