Unclaimed personal property: employee benefit plan distributions

A plan distribution can avoid being transferred to the state only when the plan has actually forfeited it and has not reversed that forfeiture. The law also adapts its operation to federal limits, including federal retirement-plan law.

What the law does ​

• Requires an employee benefit distribution to be actually forfeited, with no reversal by the plan, before it qualifies for the exception from transfer to the state.
• Retains the general rule that unclaimed employee benefit distributions transfer to the state after three years.
• Preserves a residuals participant’s right to reclaim a distribution after a plan declares it forfeited.
• Applies the law only to the extent permitted by federal law and United States Department of Labor statutes, regulations, or guidance.
• Authorizes the Controller to make multistate agreements or contracts to ensure covered property delivered to California complies with federal law.

Who it affects ​

• Participants and beneficiaries with unclaimed employee benefit plan distributions.
• Employee benefit plan administrators, fiduciaries, trusts, and custodial funds.
• The Controller, when receiving property subject to these rules.

Context ​

Federal law may limit California’s authority over employee benefit plan distributions.