§ 1521.Employee Benefit Plan Distributions

Retirement, health, and welfare plans distribute money to participants and beneficiaries, and Section 1521 sets the escheat rule for payouts that never reach anyone. A distribution and any income it earns escheats if the owner has not, within three years after it becomes payable or distributable, accepted it, corresponded about it in writing, or otherwise shown an interest documented with the plan's fiduciary or administrator. The section defines “fiduciary” as anyone exercising authority over the plan's money or property, and “administrator” as whoever the plan documents name for that role, or the employer if no one is named.

Plans are allowed to opt out of this escheat rule in a specific way: if the plan itself contains a forfeiture provision, or expressly lets the administrator declare a distribution forfeited when a beneficiary cannot be found after a specified time, and the trust or fund has not already terminated before that forfeiture would take effect, the distribution does not escheat to the state at all. The plan's own forfeiture rule governs instead. But that forfeiture is not necessarily permanent for one specific category: a participant entitled to a distribution paid in the form of residuals, the additional compensation collective-bargaining agreements provide for domestic and foreign use of recorded materials, is relieved of a declared forfeiture just by making a claim for it.