Proposed Bill Would Permit Transfer of Unclaimed Retirement Distributions to State Claim Programs

A bill introduced in the House of Representatives would direct the Department of Labor to allow retirement fiduciaries to transfer unclaimed retirement distributions to a given state’s unclaimed property program.

The Unclaimed Retirement Rescue Plan, introduced by Representative Seth Magaziner, D-Rhode Island, and co-sponsored by Representative Ron Estes, R-Kansas, would permit retirement plan administrators, on a voluntary basis, to transfer unclaimed retirement distributions valued between $50 and $5,000 into state unclaimed property programs.

This would occur through the SURCH [States’ Unclaimed Retirement Clearing House] program proposed by the National Association of State Treasurers, for which Magaziner and Estes claimed to have commitments from 47 states.

In addition, states would be required to provide regular updates to the Department of Labor’s Retirement Savings Lost and Found database, making it easier for individuals to locate and recover their funds. Finally, the secretary of labor would be tasked with reporting to Congress on the overall effectiveness and impact of these regulations.

In December 2024, the Department of Labor’s Employee Benefits Security Administration launched the database, as directed by Congress in the SECURE 2.0 Act of 2022, to help plan participants and plan beneficiaries find retirement balances of which they have lost track.

According to Magaziner and Estes, the bill would ensure that workers would have their lost savings returned to them. Working for multiple employers is common in the U.S., leaving many with lost retirement plan balances that are rolled over into individual retirement accounts and generate minimal returns. According to a recent PensionBee analysis, these left behind 401(k)s could cost an individual worker as much as $90,000 in retirement savings.

“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,” Magaziner, said in a statement. “The Unclaimed Retirement Rescue Plan will build on these systems to ensure more workers receive what they earned and can retire with dignity.”

The two representatives, joined by 35 other representatives, wrote a letter to the DOL in October 2024 that urged the department to help workers recover their lost benefits.

The DOL issued a bulletin in January that similarly supported pension plans transferring unclaimed retirement benefit payments to state unclaimed property funds.