Recently, Pennsylvania amended its escheat law to shorten its dormancy period from five to three years. In addition, the state issued updated interpretations on how to comply with its unclaimed property regulations.
The new guidance required escheatment of shareholder property based on the last date of proactive contact by the shareholder – for example, cashing a check, voting their proxy, calling a representative or accessing their account online. This resulted in much broader criteria than a focus on shareholders who are identified as “lost” based upon mail being returned by the post office.
As a result, the number of shareholders who would be eligible for escheatment increased significantly. Shareholders with valid mailing addresses may have had no occasion to contact their transfer agent – for example, shareholders who participate in a reinvestment plan or shareholders of non-dividend-paying companies – and now would be at risk of escheatment.
Computershare’s unclaimed property experts met with the state of Pennsylvania to explain the negative impact this would have on shareholders. Consequently, the state issued updated criteria for escheatment, as follows:
- Cash dividend accounts with no proactive contact in three years
- Non-dividend accounts that are currently lost with no proactive contact in three years
- Dividend reinvestment plan accounts that are currently lost with no proactive contact in three years
- Unexchanged accounts with no proactive contact in three years
- All outstanding checks older than the dormancy period, regardless of contact
Gaining clarification protects the assets of thousands of shareholders in dividend reinvestment plans or those who own shares in non-dividend-paying companies. Our work with the state of Pennsylvania is another example of our efforts to keep up with changing regulations and advocate on behalf of our clients as well as their valuable shareholders.
Computershare clients who have any questions regarding changes to Pennsylvania’s unclaimed property rules should contact their relationship manager.