​Georgeson hosted its 3rd Annual Unclaimed Property Forum and Holiday Social in downtown Manhattan on December 5, 2019. Cindy Nisley, President of the Unclaimed Property Services group, opened the session with a fantastic magic trick to illustrate how Georgeson can help holders break the chains of non-compliance.

During the forum, attendees were educated on topics of unclaimed property basics, tips and tricks to managing an effective outreach and due diligence program, juggling audits and VDAs, litigation and hot topics, and a state session with Kelly Kuracina, New York Assistant Bureau Director, Dana Terry (Georgeson) responding from the perspective of the Revised Uniform Unclaimed Property Act (RUUPA), and Pamela Wentz (Georgeson) responding from the prospective of states that are outliers or have more unusual provisions with respect to the question proposed.

The top 5 questions previously received by audience members were compiled and asked of the panelists. Below is a list of the questions asked and the responses Kelly provided as they relate to the state of New York only. 


Question: How long do you hold securities before liquidating and do you make the owner whole upon claiming?

Answer: NY law allows the Comptroller to liquidate securities in his/her discretion as soon as deemed practicable. Owners have the option of receiving shares or cash value for their shares when they submit their claim. If they select shares, and shares are available, they will be returned.  If the owner selects cash value, or if shares are not available, the closing price per share on the date of claim approval is returned. In either case, the payment includes all accruals and corporate activity that has taken place from the time the shares were delivered to the Comptroller until the claim is approved. This is based on a law change that happened in 1991. If shares were delivered to the Comptroller prior to 1991, the owner is entitled to sale proceeds only.


Question: Do you use third party auditors, if so, who do you use and why?

Answer: NY has a contract with three firms for auditing holders of abandoned property: Kelmar, Verus and Audit Services US. They are primarily used for out of state audits. Without a contract, NY would not be able to pay an external source for services that discovered abandoned property as a result of an audit. Therefore, if the funds went uncollected, the owner’s rights would not be preserved, and the holder could not be indemnified. These firms supplement our in-house auditing resources and report to our Director of Audits on all audit activity conducted on behalf of the Comptroller.


Question: How do you define owner contact?

Answer: NY law requires owner contact for the purposes of due diligence be in writing, such as a signed affirmation of knowledge of the account.  However, owner activity is more broadly considered when determining dormancy of an account.  Activity can include a variety of owner-initiated transactions and linkage to other active accounts.  We continue to support updating the law to include electronic communications to substitute for written contact.


Question: What is your policy on interest, waivers, and VDAs?

Answer: We encourage all holders to review NY’s Voluntary Compliance Program (VCP) or learn more about entering into a Voluntary Compliance Agreement (VCA). The VCP is for holders who haven’t reported before or haven’t reported a certain type of property. The VCA is for holders who have reported in the past but unforeseen circumstances may have revealed property that was missed or is overdue. In either case, our audit staff will work with you to determine the best course of action to get into compliance.  Visit our website for more information:  https://www.osc.state.ny.us/ouf/reporters/voluntary.htm


Question: Are you considering adopting RUUPA? 

Answer: We applaud the efforts of everyone involved in drafting RUUPA. We continually strive to update NY’s law to benefit all our stakeholders.

Other hot topics discussed during the forum include: 

  • IRS Revenue Ruling 2018-17
    • Requires 10% withholding tax at the time of escheatment of IRAs
    • Compliance date has been delayed to January 1, 2020.  The National Association of Unclaimed Property Administrators (NAUPA) has requested an additional extension which was not honored.  
    • Holder’s Coalition has created a working group to address the many implementation issues to comply with the ruling. 
    • NAUPA has provided guidance on how to report the tax withholding on the NAUPA II file layout. 
  • The 2019 Employee Retirement Income Security Act of 1974 (ERISA) Advisory Council 
    • The Department of Labor established the ERISA Advisory Council to study the effectiveness of state unclaimed property programs, reunification of unclaimed ERISA checks with their rightful owners and make recommendations as to the escheatment of uncashed ERISA checks. 
    • After several meetings and testimony from NAUPA representatives and industry stakeholders including the Holders Coalition and the Unclaimed Property Professionals Organization (UPPO), the advisory committee came back with three primary recommendations: 
  1. Clarifying that uncashed distribution checks are plan assets within the meaning of ERISA and reaffirming that ERISA preempts state unclaimed property laws to the extent of such assets
  2. The Department issue guidance stating that a transfer of amounts attributable to a missing participant’s check to a state unclaimed property program constitutes a payment of benefits under ERISA
  3. A plan fiduciary will be viewed as having satisfied its fiduciary responsibility under ERISA to the extent the fiduciary transfers amounts attributable to a missing participant’s uncashed check to a state unclaimed property program that meets minimum standards

The evening ended with networking time for peers over cocktails and hors d’oeuvres. If you have suggestions to make this event even more exciting for next year, please reach out to Dana Terry at dterry@georgeson.com. You can also reach out to Dana with any questions regarding this article. Georgeson looks forward to seeing everyone again next year; stay tuned for more information on the date and location here.