Background of the Regulation:
Escheatment is a US regulation requiring financial institutions to send abandoned property to the state after a certain period.
The regulation varies by financial instrument & state but is typically between 3 & 5 years after the account’s last activity.
Typically the regulation requires financial institutions to document all attempts to reach the client with a final 30 day notice required before the mandated escheatment to the state.
Challenges of Complying with the Regulation:
Financial institutions are facing increasing pressure to promptly transfer unclaimed assets to the states.
Failure to do so can result in the institution paying substantial interest charges & penalties.
Accurate abandoned property data collection, documentation and client notification are the primary challenges confronting large institutions in the escheatment process.
Additionally, effective Jan. 1, 2020, institutions are required to withhold the 10% tax on non-periodic designated distributions that have become unclaimed and subject to escheatment using IRS Form 1099-R prior to remittance to the state, if the owner of the IRA account did not make a withholding election.
The Meritsoft Escheatment module is specifically designed to:
- provide firms with a robust audit trail of all historical data collection and client contact
- Provide a Rules-based and flexible solution
- comply with various state regulations
- client notification and communication
Address specific operational needs by easily adding on modules:
Manage payments, postings, P&L calculations and SSIs. Modules can be purchased separately or added as your business needs grow.
Get set up quickly
The Escheatment functionality is a stand-alone module of Claim Manager.
Like Claim Manager, the module is an out of the box solution, which is adaptable and can be implemented quickly.
This means in no time your Escheatment obligations will be automatically captured and processed, so you can concentrate on your core business activities.
Trouble free maintenance
Escheatment utilises existing feeds/data. Furthermore it can be administered and supported by non-IT professionals.
This means you are guaranteed trouble free maintenance and IT resources will not be burdened.
To learn more about our Escheatment please Contact Us now.
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