U.S. Representatives Seth Magaziner and Ron Estes introduced legislation this week aimed at connecting participants to unclaimed retirement benefits.
The “Unclaimed Retirement Rescue Act” would permit states to reunite workers with lost retirement benefits by going through existing unclaimed property programs. While all states today operate unclaimed property programs for occurrences like returning assets to bank accounts, current law averts states from helping workers recoup retirement savings.
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Workers who struggle to access their retirement accounts have typically either left their job or their employer went out of business, Magaziner and Estes, who are also former state treasurers for Rhode Island, add. As a result, 29.2 million retirement accounts are left behind or forgotten, with assets of up to $1.65 trillion.
“Americans work hard and deserve every penny of the retirement benefits they’ve earned. As the former state treasurer of Rhode Island, I know firsthand that state unclaimed property systems are effective tools to help reconnect people with their benefits,” said Magaziner. “The Unclaimed Retirement Rescue Plan will build on these systems to ensure more workers receive what they earned and can retire with dignity.”
According to an announcement of the bill, the “Unclaimed Retirement Rescue Plan” would:
- Allow retirement plan administrators to voluntarily transfer unclaimed retirement distributions between $50 and $5,000 to state unclaimed property programs through the States’ Unclaimed Retirement Clearing House (SURCH) initiative, which is already used by states and private-sector benefit plan administrators.
- Direct states to regularly update the Department of Labor’s Retirement Savings Lost and Found (RSLF) database so individuals can more easily track and recover their money.
- Require Secretary of Labor Lori Chavez-DeRemer to report to Congress on the effectiveness of these regulations.
“As a former Kansas State Treasurer, I know how unclaimed property programs protect and return lost assets in an efficient manner,” said Estes. “Working with Congressman Magaziner at the federal level to introduce this bipartisan bill will ensure forgotten retirement funds make their way back to their rightful owners, strengthening retirement security for millions.”
The legislation is endorsed by the National Association of State Treasurers (NAST) and National Association of Unclaimed Property Administrators (NAUPA).