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UNCLAIMED PROPERTY FOCUS is a blog written by and for UPPO members, featuring diverse perspectives and insights from unclaimed property practitioners across the U.S. and Canada. We welcome your submissions to Unclaimed Property Focus. Please contact Tim Dressen via tim@uppo.org with any questions about submitting a blog post for consideration and refer to our editorial guidelines when writing your blog post. Disclaimer: Information and/or comments to this blog is not intended as a substitute for legal advice on compliance or reporting requirements.

 

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Holder Responsibility Part IV: Record Retention Nightmares

Posted By Dana Terry, UPPO 2nd vice president and member , Wednesday, October 30, 2013
Updated: Wednesday, October 30, 2013

Throughout October, we’ll be posting a series on the four tenants of holder responsibilities – reviewing records, due diligence, reporting and remitting and retaining records.

Part IV

Are you keeping your unclaimed property records for the appropriate amount of time? What is the appropriate length of time? And exactly what records should you keep? Do questions like these keep you up at night? If so, it may be time to review your company’s record retention policy.

The 1995 Uniform Unclaimed Property Act states: "A holder required to file a report under section 18, as to any property for which it has obtained the last known address of the owner, shall maintain a record of the name and last known address of the owner for 10 years, or, for the holder of records of transactions between 2 or more associations as defined under section 37(a)(2), for 5 years, after the property becomes reportable, except to the extent that a shorter time is provided in subsection (2) or by rule of the administrator.” (567.252 Section 32 (1))

In practice, this is best translated to a retention period of 10 years plus the dormancy period of the property type you are reporting. All states are different but many holders have reported some state auditors have looked back as many as 20 years during an audit. Many states don’t include record retention periods in their statute of limitations but instead require record retention periods longer than their tax statutes!

When looking at various state retention requirements, I found that some states gave time frames from when the property was reported while others gave the time frames from when the property was reportable or filed. This makes it challenging to compare state record retention periods. I referenced the 1995 Uniform Act above as a standard but it is also important to note states do have a wide range in retention periods; some as low as three years (Hawaii and Oregon) and the majority as high as 10 years. But there are also a number of states with a range from four – seven years.

Here are a few unique cases

  • Minnesota, Mississippi, and Puerto Rico are silent on record retention.
  • Kentucky requires five years for property reported in the aggregate, and is silent for all other property.
  • Maryland’s statute indicates five years but its policy states eight years.

Now if that isn’t enough to scare you into having nightmares, keep in mind that state laws are often silent on which records to keep. Holders should consider which records are necessary to protect your company in an audit. Make sure all your record retention polices are clearly documented in your policies and procedures. And most importantly, make sure you are following your own policies to prevent an even bigger nightmare in the future!

Dana Terry is a senior regulatory compliance analyst at DST Systems, Inc. She also serves as the 2nd vice president and is a long-standing UPPO member. For questions, contact Dana at 816-843-8367.

More Resources

Keep an eye out for the release of the Introduction to Unclaimed Property webinar

To learn more about record retention and suggested practices attend the 2014 Annual Conference in March 2014!

The UPPO Buyer’s Guide lists UPPO members that provide services to assist or consult with record retention


Tags:  holder responsibility  record retention  unclaimed property  UPPO 

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Holder Responsibility Part III: Reporting and Remitting in a Timely Manner

Posted By Danielle Herring, UPPO member, Thursday, October 24, 2013
Updated: Thursday, October 24, 2013

Throughout October, we’ll be posting a series on the four tenants of holder responsibilities – reviewing records, due diligence, reporting and remitting and retaining records.

Part III

How can you ensure that your reports are delivered and the amount you owe is remitted in a timely manner? Here are some things to consider.

We all think of the report due date as the finish line, but where does one start? It all starts when property appears to have been abandoned by the owner. I won’t get into definitions of abandonment in this post, but you can find this information on states’ websites, from your unclaimed property software and service providers, and various other sources. At some point, you gather the information about the owner and their property, and begin to keep track of how much time has passed.

The states have different dormancy requirements for different types of property. This information can be found in the state reporting handbooks on each state’s website (there’s a handy list of state websites on the govWATCH website). Most property has to age three or five years. Some property types, such as payroll, have a shorter dormancy requirement of one or two years.

After the appropriate number of years goes by and the property has still not been claimed, your next step is to send out due diligence letters to try to locate the owners before their property is turned over to the states. It is important to send these letters out on time. Most states require the letters be sent at least 60 days before the report due date. If you get a late start on letters, this may delay your state reporting as you’ll want to give the owners a chance to respond to the letters.

When the appropriate amount of time has passed for owners to respond to the letters, you’ll want to generate your state reports. Most states require a signed coversheet as part of your report submission. You’ll need to factor in enough time to get the cover sheets signed by an officer of your company, get your remittance set to go to the states, and ship your reports and remittances to the states so they arrive on or before the due date.

Using unclaimed property reporting software makes this process much more efficient than if you were to track everything manually. Most state websites have links to free software providers you can use. These systems allow you to input your data, generate due diligence letters, and generate the NAUPA electronic files and cover sheets for submission.

The free services also include tables to show how long each type of property for each state must remain abandoned before it is reported, as well as information about how you can make your payment (physical check or ACH/EFT/wire payments). This is very helpful and will save you time as you won’t have to visit each state’s website and research this information on your own.

It is important to note that your report submission is not considered complete until the state has received your payment.

There is a free online portal, called UPExpress, where you can submit reports and cover sheets for 25 participating states. You can access it at https://upexpress.eagletm.com/.

Many states have their own online delivery methods listed on their websites. You can use these to upload your file to the state website and receive a receipt with payment information.

Some states still require the NAUPA file on a CD which you must physically mail to them. Make sure to allow enough time for shipment.

If you remember to gather your unclaimed property data regularly, send your due diligence letters on time, and use the most efficient method of delivery for report and payment, you will have everything completed in plenty of time.

Next week we’ll wrap up the series with Part IV: Retaining Records.

Danielle Herring is a UPExchange Product Manager at Eagle Technology Management. She is also a UPPO member and serves on the UPPO eLearning Committee and Introduction to Unclaimed Property Webinar Task Force. The free webinar will be released soon! For related questions you can contact Danielle at Danielle.Herring@byetm.com.

More Resources

The Buyer’s Guide is a useful tool to identify service-providers that can help your company

Tags:  remitting  reporting  service providers  unclaimed property  UP 101  UPPO 

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Register for the 2014 Annual Conference

Posted By Administration, Tuesday, October 22, 2013
Updated: Tuesday, October 22, 2013


You can now register for the 2014 Annual Conference, March 23-26, 2014 in Dallas, Texas! March seems like a long time from now, but that time will fly by with reporting deadlines and holidays sprinkled in between now and March.


Register Now and Save

  • Save $100 off the cost of registration
  • Secure a room in the Gaylord Texan Resort and Convention Center
  • Make affordable travel accommodations

To register and to view the agenda the professional development committee has planned for you, visit uppo.org/annualconference! Contact Jackie Cote, association manager, with conference questions at jackie@uppo.org or 508-883-9065.

Please note registration is currently only available to attendees; exhibitor information will be available Oct. 25, 2013.

Tags:  annual conference  education  professional development  unclaimed property  uppo 

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Holder Responsibility Part II: Due Diligence

Posted By Brianne Scott, Unclaimed Property Professionals Organization, Thursday, October 17, 2013
Updated: Wednesday, November 6, 2013

Throughout October, we’ll be posting a series on the four tenants of holder responsibilities – reviewing records, due diligence, reporting and remitting and retaining records.

Part II

 

Here’s the bottom line, conducting due diligence is important to your company. Reconnecting owners with their money impacts the happiness of your customers and the amount of money you have to escheat to the state. Because it’s a time-intensive process, calling upon a third-party provider might be an appropriate step for some holders.

 

There are a number of third party service providers, many of them members of UPPO that offer a wide array of services. Whether you want them to manage the entire process or just portions of it, you have a number of options available.

 

What are the BENEFITS of using a third party due diligence service provider?

  • First and foremost, you don’t have to know the legal requirements in every state. Service providers take over the burden of staying current on the ever-changing legislative and legal requirements in all states and jurisdictions.
  • Using your data from any open accounts, they run it against a matrix based on property type, statutory requirements and other factors to track property and determine when it becomes dormant (eligibility).
  • If your internal process is to locate property owners PRIOR to dormancy (pre-escheat), many providers will assist with that process.
  • When property is deemed dormant, they can perform the required due diligence, in accordance with applicable laws, to attempt to reunite the property with its rightful owner.
  • Tracking and responding to the communications with property owners is a critical piece in the due diligence process. Service providers can offer a variety of options including validation of the response; handle any subsequent transactions, etc.
  • Most providers are able to do all of your reporting, regardless of whether you report to one state or multiple states and jurisdictions.
  • Many will respond on your behalf to questions and/or inquiries made by unclaimed property administrators pertaining to filed reports.

 

What are some CONCERNS about using a third party due diligence service provider?

  • As with any service, it can be a matter of cost. It is important to determine the return on investment for your organization.
  • Sensitive client/customer data must be provided to the service provider for them to do their job. Data security is a key component when researching any of the providers.
  • Some unclaimed property professionals feel a loss of process control. It is critical that you understand how the provider will communicate with you to assure the process is being handled to your satisfaction.

 

Here are few things to consider if you’re looking for a third party due diligence provider.

  • How do they track legislative, regulatory and legal activity?
  • What type of indemnification do they provide to you?
  • If there are any types of errors in the due diligence or reporting process, will they pay any penalties?
  • What industries do they have experience in? Insurance, securities, banking, utilities, etc.?
  • Can they demonstrate they clearly understand what triggers dormancy and how "contact” is defined? In some cases there may be dual triggers so it’s important to be sure they understand your specific industry.
  • When they send due diligence letters on your behalf, do they use generic letters or letters formatted specifically to state statutes? Will they use your letterhead or stationery?
  • Will they perform the entire process for you and/or allow you to select specific processes? For example, they track your accounts, perform the necessary due diligence when a property type is deemed dormant, but you handle the reporting to the state(s).
  • What type of security processes and systems do they have in place to protect your sensitive data?
  • Will they respond on your behalf to inquiries from unclaimed property administrators regarding reports?
  • What type of flexibility do they have to respond to the owner?
  • How will they communicate with you to assure your standards are being met? What’s the frequency of reporting? If they are handling any transactions with property owners on your behalf, how do they reconcile with you?
  • How flexible is the company in working with you the first year versus successive years and does their fee structure accommodate the various volume levels? For example, if this is the first year you’ve reported, the volume may be much larger than it will be in subsequent years.
  • How flexible are they in providing responses to inquiries by owners?
  • Can they do address verification in advance of sending any letters to help reduce costs? If a potential owner has multiple properties, can they list them all on a single letter rather than individual letters?
  • As with any service, it is important to check references, both current and past clients. Be sure there are at least two or three from your industry.

 

As an unclaimed property professional, it is your job to assure the organization’s compliance with unclaimed property requirements. Using the services of a third party due diligence provider can protect your company from an unclaimed property audit and impact the bottom line.

 

Next week we’ll be continuing the Holder Responsibility series and talking about reporting and remitting.

 

More Resources

 

The UPPO Buyer’s Guide categorizes all UPPO service provider members by service type

Register for the 2014 UPPO Annual Conference on March 23-26, 2014 to meet with service providers

Learn more about due diligence suggested practices

Tags:  compliance  due diligence  service providers  unclaimed property  UPPO 

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What’s up with the Board? July, August, September Recap

Posted By Carla McGlynn, UPPO secretary , Thursday, October 10, 2013
Updated: Thursday, October 10, 2013

Whew, the past few months have flown by, can you believe reporting deadlines are already here? During the past three months (July, August, September) the UPPO Board of Directors have discussed exciting potential projects and developments. I can ensure you, that the conversations happening in committee and board of directors meetings is positioning our organization to remain the leader in unclaimed property education and information.

In an effort to remain transparent, I take on the responsibility to relay the information discussed in the board meetings to the members. Below I’ve outlined what we’ve been talking about and the projects you can look forward to.

Past Decisions

  • Prior to the Holders Seminar in August we met as a board to review and approve the business plan of the upcoming year!
  • The board teamed up with the UPPO Government Relations and Advocacy Committee to review the membership advocacy survey results and prioritized UPPO’s reform priorities.
  • The board approved the member services committee’s proposal to expand the Member Resources page and establish a procedure of reviewing submissions.
  • We have continued to encourage members to be guest bloggers of the UPPO Focus blog.
  • Creating a Speakers Bureau Registry was given the green-light.

Keep on the Lookout For:

  • A membership survey in late October -- we want to hear from you!
  • An unclaimed property certificate program – a task force has been created to discuss the criteria.
  • Introduction to Unclaimed Property webinar. This free learning opportunity will be available soon!
  • Expansion into Canada. We are currently researching the possibility of hosting a Holders Seminar in 2014 in Toronto.
  • A free, unclaimed property state guide that will be accessible by members on the UPPO website.

You can rest assured the board is moving the organization forward and listening to your wants and needs. If you have something you’d like the board to consider contact Toni Nuernberg, executive director at toni@uppo.org. Or if you are interested in participating on a committee check out the current opportunities at www.uppo.org.

Tags:  board of directors  unclaimed property  UPPO 

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