Section 760.200 Tax-Deferred and Tax-Exempt Accounts

TITLE 74: PUBLIC FINANCE

CHAPTER V: TREASURER

PART 760 REVISED UNIFORM UNCLAIMED PROPERTY ACT

SECTION 760.200 TAX-DEFERRED AND TAX-EXEMPT ACCOUNTS

Section 760.200  Tax-Deferred and Tax-Exempt Accounts

a)         Sections 15-202 and 15-203 of the Act indicate

when "tax deferred" and "tax exempt" accounts are

presumptively abandoned. Section 15-202 prescribes the rules for tax deferred and

tax exempt retirement accounts and Section 15-203 prescribes the rules for

other tax deferred accounts. These rules for tax deferred and tax exempt accounts

generally have longer periods of abandonment than accounts covered by Section

15-201 of the Act.

b)         A Roth IRA is covered under Section 15-202.

c)         In some cases, federal law, specifically ERISA (29

U.S.C. 1001 et seq.), may preempt the Act and prevent reporting and remitting

retirement accounts or other property representing a retirement plan asset that

would otherwise be reportable under the Act. Concerning ERISA preemption and

unclaimed property statutes, see

Commonwealth Edison Co. v. Vega

, 174 F.3d 870 (7

th

Cir. 1999).

Nonqualified, government and church plans are

not subject to an ERISA preemption, nor are uncashed plan distribution checks

issued by a qualified plan that lacks, or has failed to exercise, a forfeiture

or other reversionary interest.

d)         If a holder is uncertain whether an account

qualifies as tax deferred or tax exempt under the Act (i.e., whether the

account is covered by Section 15-201 or by Sections 15-202 and 15-203), whether

ERISA preempts the Act for a retirement account, or whether an account is

covered by Section 15-202 or Section 15-203, the holder may specifically

identify the property in a report filed with the administrator or give express

notice to the administrator of a potential dispute regarding the property

e., whether the

account is covered by Section 15-201 or by Sections 15-202 and 15-203), whether

ERISA preempts the Act for a retirement account, or whether an account is

covered by Section 15-202 or Section 15-203, the holder may specifically

identify the property in a report filed with the administrator or give express

notice to the administrator of a potential dispute regarding the property.

Specifically identifying the property in a report or providing express notice

to the administrator both ensures that the property will be covered by the

limitations period of Section 15-610 of the Act and demonstrates that the

holder is attempting to comply with the Act in good faith and without

negligence. Specifically identifying the property in a report filed with the

administrator indicating that the property is not being remitted because ERISA

preemption allows a holder to satisfy both its fiduciary obligation under ERISA,

which would generally prohibit remitting the property to the administrator, and

any obligation under the Act.

e)         Pursuant to Section 15-405 of the Act (property

reportable and payable or deliverable absent owner demand provision) and

Section 15-610(a) of the Act (anti-limitations provision) a nonqualified plan

or plan not otherwise subject to preemption under ERISA is prohibited from

forfeiting an account or other property.

f)         The

administrator will accept missing participants' account balances reported and

remitted by an ERISA plan fiduciary for a terminated defined contribution plan.

See United States Department of Labor Field Assistance Bulletin No. 2014-01 (available

at www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/field-assistance-bulletins),

which indicates that, despite the ERISA preemption for ongoing plans, a plan

fiduciary may report and remit "missing participants' account balances

under a state's unclaimed property statute to complete the plan termination

process"

tes Department of Labor Field Assistance Bulletin No. 2014-01 (available

at www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/field-assistance-bulletins),

which indicates that, despite the ERISA preemption for ongoing plans, a plan

fiduciary may report and remit "missing participants' account balances

under a state's unclaimed property statute to complete the plan termination

process".

g)         Additional

outreach for non-retirement, long-term, tax-deferred and tax-exempt accounts:

1)         In

the tenth year after the opening of an account holding property covered by

Section 15-203 of the Act in which the apparent owner has not, within the

previous three years, indicated an interest under Section 15-210 of the Act and

the account is not otherwise presumed abandoned, the holder shall attempt to

contact the apparent owner of the account in a manner substantially similar to

the manner in which notice is provided under Section 15-501 of the Act.

2)         This

additional outreach is not a replacement for the due diligence notice

requirement under Section 15-501 of the Act and Section 760.460 of this Part.

3)         The

purpose of this additional holder outreach is to ensure that the apparent owner

is both alive and aware of the account. If the owner of the account is

deceased, then the provisions of Section 15-203(b) of the Act apply.

4)         If

the apparent owner of the account indicates interest in the account as defined

in Section 760.300 of this Part, the holder does not need to make any

additional outreach to the apparent owner.

5)         For

accounts valued at $50 or more, the holder shall attempt to contact the

apparent owner.

A)        The

holder may initially attempt to contact the apparent owner using the U.S. Mail,

e-mail, telephone, or an in-person visit

ndicates interest in the account as defined

in Section 760.300 of this Part, the holder does not need to make any

additional outreach to the apparent owner.

5)         For

accounts valued at $50 or more, the holder shall attempt to contact the

apparent owner.

A)        The

holder may initially attempt to contact the apparent owner using the U.S. Mail,

e-mail, telephone, or an in-person visit.

B)        If the

initial attempt to contact the apparent owner does not result in apparent owner

interest, as defined in Section 760.300 of this Part, the holder should attempt

a different method of contacting the apparent owner.

C)        To the

extent not otherwise prohibited by other laws, the holder may:

i)          use

electronic search tools to find more up-to-date contact information for the

apparent owner, and

ii)         attempt

to contact individuals that the apparent owner designated as a beneficiary or

contingent beneficiary (e.g., spouse, children) to find updated contact

information for the apparent owner.

D)        The

holder shall send notice by certified U.S. Mail to the apparent owner if:

i)          the value of the

account is more than $1,000,

ii)         other

attempts at contact have not resulted in apparent owner interest, as defined in

Section 760.300 of this Part, and

iii)        the

holder has in its records an address for the apparent owner that the holder's

records do not disclose to be invalid and is sufficient to direct the delivery

of U.S. Mail to the apparent owner.

6)         After

at least two attempts to contact the apparent owner which do not result in

apparent owner interest, as defined in Section 760.300 of this Part, the holder

may report and pay or deliver the property in the account to the administrator

pursuant to Section 15-608(b) of the Act and Section 760.430 of this Part. No

additional consent from the administrator is required to report and pay or

deliver the property under this Section

t the apparent owner which do not result in

apparent owner interest, as defined in Section 760.300 of this Part, the holder

may report and pay or deliver the property in the account to the administrator

pursuant to Section 15-608(b) of the Act and Section 760.430 of this Part. No

additional consent from the administrator is required to report and pay or

deliver the property under this Section. The payment or delivery of the

property to the administrator pursuant to this Section is considered to have

been made in good faith. On payment or delivery of the property to the

administrator, the property is presumed abandoned.