State-Level Missing Check Clearinghouse Launches

As recordkeepers and plan sponsors strive to address the ongoing problem of uncashed retirement plan distribution checks, a clearinghouse has launched to help address the problem from the state level.

The States’ Unclaimed Retirement Clearing House was created by the National Association of Unclaimed Property Administrators, a division of the National Association of State Treasurers. The program offers an online portal through which plan sponsors and recordkeepers can voluntarily report missing retirement funds to their plans’ states of incorporation.

In 2019, the Department of Labor tasked the ERISA Advisory Council—a panel Congress created to provide input to the DOL on issues governing the Employee Retirement Income Security Act—with addressing whether it would be advisable for uncashed checks to be reported and remitted to state unclaimed property programs.

During a series of public meetings, stakeholders advocated that transferring responsibility to the states would be favorable, based on the high success rate states have experienced in locating and paying owners of other kinds of unclaimed property; the fact that owners are not charged to recover their property; and that a claim may be filed by an owner or heir at any time, according to the clearinghouse website.

The DOL considered the ERISA Advisory Council’s report and recommendations; engaged with state governments and industry stakeholders; and, on January 14, 2025, issued Field Assistance Bulletin No. 2025-01, which stated, “the Department will not pursue violations under ERISA section 404(a) in connection with the voluntary decision to transfer retirement benefit payments (including uncashed checks) owed to a missing participant or beneficiary from an ongoing pension benefit plan to a state unclaimed property fund.”

The bulletin stated that checks are eligible to be reported to states if they are worth $1,000 or less; issued to a plan participant with a last known address in a participating state; and at least 1 year old.

Sponsors transferring checks must report a participant’s name, address and Social Security number, check date, check amount, check type, plan name and whether the plan maintains additional property for the participant that is not currently reported through the clearinghouse as unclaimed. If a plan’s records do not include a participant’s name and address, the plan sponsor must undertake a “good faith” effort to retrieve the records before transferring the check to the state.

U.S. Bank serves as the clearinghouse administrator and custodian of the program.

There are currently 37 states that meet the eligibility criteria of FAB No. 2025-01 for participating in the clearinghouse, according to the SURCH website.